Grupo Aeroportuario del Pacífico S.A.B. de C.V. (PAC), a top Mexican airport operator, recorded a 6.2% increase in passenger traffic for September 2010 in comparison with the same period of fiscal 2009.
Domestic traffic rose 7.6% while International traffic shot up by 2.5% year over year. In August 2010, Grupo Aeroportuario del Pacífico recorded a 3.6% year-over-year increase in its traffic with a 2.3% increase in domestic traffic and 6.6% International traffic.
In July 2010, passenger traffic grew 11.3% year over year with an increase of 7.8% in domestic traffic and 19.7% in international traffic. Thus, we expect a significant increase in passenger traffic in the third quarter of fiscal 2010 comprising July, August and September 2010.
Mexican airport operators, Aeroportuario del Sureste, S.A.B. de C.V. (ASR), Aeroportuario del Centro Norte S.A.B. de C.V. (OMAB) and PAC have been experiencing an increase in passenger traffic since the second quarter of fiscal 2010 compared to the huge drop in traffic during the same period in fiscal 2009.
The decrease in passenger traffic from the second quarter of fiscal 2009 through March 2010 was hastened by the H1N1 flu, which broke out in April 2009, and the difficult business environment due to the economic instability since the second half of fiscal 2008.
However, markets are now gradually picking up and are expected to show some decent results in the coming years. Fuel prices have also reduced to their mid-70s from the peak of nearly $150 per barrel. The International Air Transport Association (IATA) expects the airline industry to make a profit of $2.5 billion in 2010.
We maintain our long-term Neutral recommendation on PAC. For the shorter term, the ADR currently retains its Zacks #3 Rank, equivalent to a Hold rating.
GRUPO AEROP-ADR (ASR): Free Stock Analysis Report
GRUPO AEROP-ADS (OMAB): Free Stock Analysis Report
GRUPO AEROP-PAC (PAC): Free Stock Analysis Report
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