Mexican airport operator, Grupo Aeroportuario del Centro Norte S.A.B. de C.V. (OMAB) recorded a marginal increase in its passenger traffic in October 2010 compared with the year-ago period. Total traffic moved up by only 0.9% with Domestic traffic surging 0.7% while International traffic rising 12.3% year over year.
An insignificant amount of increase in Domestic traffic was driven by the suspension of operations of the Grupo Mexicana airlines in major airports since August 28, 2010.
During the third quarter of fiscal 2010, passenger traffic rose 4.3% year over year with 2.7% and 14.9% increase in Domestic and International traffic, respectively. During the second quarter, first time since the beginning of fiscal 2009, total traffic went up by 6.5%.
GrupoAeroportuario del Centro Nortetogether with Grupo Aeroportuario del Pacífico S.A.B. de C.V. (PAC), Grupo Aeroportuario del Sureste, S.A.B. de C.V. (ASR) have been experiencing an increase in passenger traffic since the second quarter of fiscal 2010 compared with the huge drop in traffic during the comparable period in fiscal 2009.
The decrease in passenger traffic from the second quarter of fiscal 2009 through March 2010 was based on 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 gradually picking up at present and are expected to show some decent results in the coming years. Fuel prices have also been settled to their mid-80s 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 Aeroportuario del Centro Norte and the ADS currently retains its Zacks #4 Rank, equivalent to a short-term “Sell” rating.
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