Pacifico Calmly Leads Its Market
We believe this Mexican airport operator is the best positioned to take advantage of increasing traffic.
Of the three publicly traded Mexican airport operators, Grupo Aeroportuario del Pacifico (PAC) holds the largest passenger market share at 26%, compared with 23% for Grupo Aeroportuario del Sureste (ASR) and 15% for Grupo Aeroportuario del Centro Norte (OMAB). Growth remains strong as Mexican airlines are expanding fleets and opening routes. Unique routes served by Pacifico have grown at a roughly 6% average over the past five years, and we expect this trend to continue. In the past, few direct routes were offered to passengers because Mexico City served as the central hub and connector between airports. However, enhanced infrastructure and greater spending power from the middle class has lessened dependence on Mexico City. Pacifico has been able to take advantage of this as well as the strong U.S. dollar and ideal tourism conditions--for example, the U.S.-Mexico bilateral aviation agreement that went into effect in 2016.
According to its government-granted concession, each airport must adhere to regulated fees charged to customers, and rates are adjusted periodically for inflation. The airport operators must comply with the master development plan, which lays out maximum rates and required minimum construction and maintenance expenditures every five years. The expenditures are required to improve infrastructure and flying conditions for passengers and airlines.
Chris Higgins does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.