OMAB: Marginal Growth in 3Q Traffic – Analyst Blog

Mexican airport operator, Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (OMAB) has released its passenger traffic data for September 2010 in comparison with September 2009.

 

During September, total passenger traffic grew marginally by 2.7% year over year with increases of 1.5% in domestic traffic and 10.8% in international traffic. During August, the company reported a total traffic growth of 5.2% year over year with domestic and international traffic increasing 4.2% and 11.7%, respectively.

 

During July 2010, total passenger traffic grew 4.6% year over year with 2.2% and 20.8% increases in domestic and international traffic, respectively. Thus, the company will report a marginal increase in passenger traffic during the third quarter of fiscal 2010.

 

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.

 

Passenger traffic growth is higher compared with the huge decrease in passenger traffic in the same period during 2009 due to the outbreak of the H1N1 flu in Mexico in 2009.

 

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.

 

The stock currently has a short-term Zacks #3 Rank (Hold rating) and we reiterate our long-term Neutral recommendation for Grupo Aeroportuario.