EUR 850.00 For Business Accounts Only

Morningstar | Pacifico Begins to Navigate a Flight Path Through a Post-AMLO World

Out of three publicly traded Mexican airport operators, Pacifico holds the largest percentage market share at 26% (23% for Sureste and 15% for Centro Norte). Growth remains strong as airlines are expanding fleets and opening routes. Unique routes served by Pacifico have grown at a roughly 6% on 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 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. 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 is constructed to lay 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. In addition to its operations in Mexico, Pacifico acquired a 74.5% stake in Desarrollo de Concessiones Aeroportuarias in 2015, the entity that holds the concession (until 2033) to operate Jamaica’s Montego Bay International Airport and recently won the right to operate the Kingston airport in Jamaica as well. Jamaican airports account for roughly 20% of Pacifico's revenue and represents the company's only airports outside Mexico. Similar regulations and conditions apply to the airports in Jamaica as maximum rates and a capital development plans are structured in consultation the Jamaican government. Montego Bay is Jamaica’s primary airport, essentially all passengers are international, and the U.S. dollar is the functional currency, lessening Pacifico's dependence on the peso. In 2017, the airport served 4.2 million terminal passengers (compared with 36.5 million passengers served in Mexico) with roughly two thirds of those passengers arriving from the United States.