Grupo Aeroportuario’s Traffic Falls – Analyst Blog

Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (OMAB) has released its total passenger traffic data for April 2010.

 

During the month, passenger traffic slipped 5.5% year over year, with domestic passenger traffic decreasing 6.0% and international passenger decreasing 2.7%.

 

The decline in domestic passenger traffic was primarily driven by lower traffic at the Acapulco, Monterrey, Tampico, Zihuatanejo, Torreon, and Durango airports. Besides, international traffic was affected by lower traffic at the Acapulco, Monterrey, and Zihuatanejo airports.

 

The decrease is the after-effect of the global recession that started in 2008, worsened by high oil prices of $150 per barrel and the outbreak of the H1N 1 virus in 2009 in Mexico.

 

However, currently the markets are picking up and oil prices are in their mid-seventies. This can be a favorable situation for the entire industry and Grupo Aeroportuario in particular.

 

The industry is likely to show some improvements in 2010, but it will take years to recover the losses incurred in 2008 and 2009. Thus, the company will continue posting lower passenger traffic for the next couple of quarters.

 

Other Latin American and Chinese airline stocks will perform well in 2010 provided the overall economy continues to grow. Besides, the economic growth in emerging markets will be higher than that in the developed markets. We reiterate our Neutral recommendation on the ADR.