Grupo Aeroportuario's Traffic Rises - Analyst Blog

Mexican airline operator, Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (OMAB) has released its passenger traffic data for July 2010.
 
During the month, total passenger traffic grew 4.6% year over year with increases of 2.2% in domestic traffic and 20.8% in international traffic. The increase in passenger traffic was driven primarily by international passenger traffic, which went up due to the commencement of new routes by VivaAerobus and Aeromexico, and also due to the marginal market recovery.
 
During the second quarter of 2010, which ended on June 30, 2010, Grupo Aeroportuario recorded a 6.5% year-over-year increase in total passenger traffic, the highest in the eight preceding quarters, including this quarter. Domestic passenger traffic grew 5.1% and International traffic rose 15.3% year over year. The increase in July as well as in the second quarter was primarily attributable to a huge decrease in passenger traffic in the same period during 2009 due to the outbreak of the H1N1 flu in Mexico.
 
During the economic downturn in 2008, the aviation industry also saw cancelled flights and discontinuation of certain routes in order to neutralize the steep rise in operating costs.
 
However, markets are picking up gradually and are expected to show some decent results in the coming years. The International Air Transport Association (IATA) expects the airline industry to make a profit of $2.5 billion in 2010. Fuel prices have also reduced, which led to lower operating expenses in the second quarter for Grupo Aeroportuario. Total operating expenses based on revenues fell by 490 basis points.
 
We currently have a short-term Zacks #3 Rank (Hold) rating and a long-term Neutral recommendation for Grupo Aeroportuario.
 
 
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