Recently, major Mexican airlines companies reported a decrease in passenger traffic for the month of June.

Grupo Aeroportuario del Pacifico S.A.B. de C.V. (PAC) announced a 20.1% decline in total terminal passengers year-over-year, comprised of 17.5% decrease in domestic passengers and 25.4% drop in international passengers.

Grupo Aeroportuario del Sureste S.A.B. de C.V. (ASR) announced a fall of 28.4%, with 17.6% in the domestic sector and 36.7% in the international sector.

Grupo Aeroportuario del Centro Norte S.A.B. de C.V. (OMAB) reported a decrease of 20.5% in total passenger traffic, with domestic traffic down 18.4% and international traffic tumbling 32.3%.

Passenger traffic decreased not only in June, but throughout the second quarter of 2009. PAC’s passenger traffic was down 36.6% in May and 10.4% in April. ASR’s passenger traffic dropped 50.7% in May and 2.1% in April. OMAB reported a fall of 39.7% in May and 17.7% in April. The major reason for the underperformance of Mexican airlines was the outbreak of swine flu in the country.

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. While AMR Corp. (AMR) subsidiaries American Airlines and American Eagle reported a fall of 7.9% in June, United Airlines of UAL Corp. (UAUA) saw a drop of 7.5%.

Falling passenger traffic would affect generation of unit (sales per available seats times miles flown) revenue within the company. Southwest Airlines Co. (LUV) expects a decline of 9% to 10% in June and American Airlines Inc. (AA) anticipates a year-over-year fall of 16% to 17% during the second quarter 2009.

However, we continue to keep our Hold rating on the shares of PAC, OMAB and ASR ahead of second-quarter results.

 

Read the full analyst report on “PAC”
Read the full analyst report on “ASR”
Read the full analyst report on “OMAB”
Read the full analyst report on “AMR”
Read the full analyst report on “UAUA”
Read the full analyst report on “LUV”
Read the full analyst report on “AA”
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