Mexican airport operator, Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (OMAB), declared an investment of MXN$500 million for better handling of baggage in its 13 airports. A part of the investment will be financed by UPS Capital Business Credit.

As the market is gradually picking up, Centro Norte is coming up with new investments as well as routes.

Recently, Centro Norte began operations at its new Terminal B at Monterrey International Airport, where Aeromexico and Aeromexico Connect were the first to operate flights.

During the third quarter of fiscal 2010, passenger traffic rose 4.3% year over year with 2.7% and 14.9% increases in Domestic and International traffic, respectively. In this context, we note that the second quarter saw a turnaround in traffic after a long hiatus, since the beginning of fiscal 2009, with traffic rising 6.5%.

The traffic decline from the second quarter of fiscal 2009 through March 2010 resulted mainly because of the outbreak of the H1N1 flu in April 2009, aggravated by a difficult business environment as a fallout of economic instability since the second half of fiscal 2008.

With the revival of the markets the airline industry is expected to show some decent results in the coming years. Fuel prices have also settled down to the mid-80s from the peak of nearly $150 per barrel. The International Air Transport Association (IATA) expects the airline industry to make a profit of $2.5 billion in 2010.

We maintain our long-term Neutral recommendation on Aeroportuario del Centro Norte. The ADS currently retains its Zacks #4 Rank, equivalent to a short-term Sell” rating.