Mexican and international airport operator Grupo Aeroportuario del Pacifico S.A.B. de C.V. (NYSE: PAC), or “GAP” as it refers to itself, managed double-digit increases in both terminal traffic and revenue during the final quarter of 2017, despite a recent easing in traffic trends. Let’s review the details of the quarter after a glance at the headline numbers from the company’s earnings report, released on Feb. 22.
Data source: Grupo Aeroportuario del Pacifico. All figures in thousands of Mexican pesos. At an exchange rate of 18.93 pesos per U.S. dollar on Dec. 31, 2017: Q4 2017 revenue, operating income, and net income convert to $162.1 million, $79.9 million, and $50.9 million, respectively.
What happened with GAP this quarter?
Domestic terminal traffic in Grupo Aeroportuario’s 12 Mexican airports and its single foreign airport — Sangster International Airport in Montego Bay, Jamaica — increased 10.6%, to 6.1 million passengers. Growth was propelled by double-digit increases in three of the company’s largest airports: Guadalajara, Los Cabos, and Puerto Vallarta.
International terminal traffic rose 8.9% to 4.4 million passengers. GAP’s largest airport, Guadalajara, reported its second consecutive quarter of a slight decline, dropping 2.5%. However, Tijuana continued to see a boom in traffic from the “Cross Border Xpress” (CBX), the pedestrian skybridge connecting San Diego and Tijuana, which also functions as a border crossing between the U.S. and Mexico. Tijuana airport’s international traffic expanded nearly 22% during the quarter from the CBX.
Total traffic rose 9.9%, off the pace of mid-teens expansion enjoyed during mid-2017, but falling within management expectations.
Aeronautical revenue, derived mostly of passenger fees, rose 12.4% in concert with the traffic boost.
Non-aeronautical revenue expanded 7.2%. The company reported that among domestic airports, a 6.8% improvement was split evenly between company-operated revenue streams such as VIP lounges, car parking charges, and advertising, and third-party services including duty-free shops, car rental, and retail operations. Montego Bay’s non-aeronautical revenue rose 9.1%, which management attributed to growth in duty-free, retail, and food and beverage operations…