Grupo Aeroportuario Sees Fewer Passengers

Early last week, Mexican airport operator, Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (OMAB - Snapshot Report), reported terminal passenger traffic at its 13 airports during August 2009. 

Total passenger traffic decreased 12.9% year over year in the month. Domestic traffic decreased 11.0%, and international traffic decreased 24.1%. However, total passenger traffic volumes decreased at a slower rate than during any prior month of the year. This effect is principally the result of the improvement in domestic traffic. 

The performance of airlines such as VivaAerobus, Grupo Aeromexico, Aeromar, and Grupo Mexicana benefited domestic traffic. Three domestic routes were opened: Mexicana Link opened the Acapulco-Guadalajara and Guadalajara-Mazatlan-San Jose del Cabo routes on August 1, and Aeromexico Connect opened the Zacatecas-Mexico City route on August 11. 

The Culiacan, Durango, and Mazatlan airports reported traffic growth of 15.7%, 23.2%, and 2.6% respectively. However, the overall volume of domestic traffic was affected by the temporary suspension of operations of Aviacsa (suspended since July 6) and the departure from the markets of Alma, Aladia and Avolar. The Monterrey, Acapulco, and Ciudad Juarez airports had the largest traffic reductions. 

The principal factors behind the reduction in international passengers were the cancellation of routes by Mexicana and Aeromexico; the suspension of Aviacsa; the departure of Delta from most of OMAB's airports, and a reduction in frequencies by Continental. Monterrey and the tourist destination airports were the most affected. 

Airlines all over the world are facing difficulties, primarily due to the collapse of the global economy. Declining business and leisure travel is affecting airlines' business to a larger extent. 

Moreover, the Mexican economy could face a tight money period in the upcoming quarters as the Bank of Mexico recently lowered its benchmark interest rate by just 25 basis points to 4.5%, reducing the scope for further rate cuts. The Mexican economy is rapidly slowing down and the trend is likely to continue in the short term. Thus, it certainly would be a difficult year for OAMB, Grupo Aeroportuario del Sureste S.A. de C.V. (ASR - Snapshot Report) and Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (PAC - Snapshot Report).
 
The crisis will be a major concern in the short term. However, lower oil prices compared to 2008 levels would help the company lower operating costs.

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