Grupo Aeroportuario del Pacifico SAB De CV ADR (PAC)

History and Background

Grupo Aeroportuario del Pacu00edfico (GAP) was founded in 1948. It became a publicly traded company in 2006 with an ADR listing on the NYSE. GAP operates under a 50-year concession agreement that began in 1998 to manage, operate, and develop 12 airports throughout the Pacific region of Mexico.

Core Business Areas

• Airport Operations: This segment manages the day-to-day operations of the 12 airports, including passenger and cargo handling, security, and maintenance. It generates the majority of GAP's revenue.
• Commercial Revenues: This segment focuses on generating revenue from commercial activities within the airports, such as retail shops, restaurants, advertising, and car rentals. It's a significant contributor to overall profitability.
• Construction Services: This segment encompasses construction and improvement projects at the airports, including terminal expansions, runway upgrades, and other infrastructure developments. Investments in infrastructure capacity in all 12 airports.

Leadership and Structure

The CEO is Rau00fal Revuelta Musalem. The company operates with a board of directors and various committees overseeing finance, operations, and corporate governance.

Key Offerings

• Airport Services: Provides a range of services, including aircraft landing and parking, passenger handling, baggage services, and security. GAP's competitors are other airport operators within Mexico and globally. The specific market share for each service is difficult to obtain precisely but revenue from aeronautical revenue contribute to around 50% of total revenue
• Commercial Spaces: Leases retail spaces, advertising locations, and other commercial areas within its airports to various businesses. Competitors include companies owning commercial spaces within Mexico's airports and other local locations. Commercial revenue contributes to around 40% of total revenue.
• Construction Services: Construction services in expanding its 12 existing airports. Direct competitors for this product can include those who provide construction services for airports in Mexico. The current revenue for this service is at about 10%

Industry Overview

The airport industry is heavily influenced by air travel demand, tourism trends, and economic conditions. It is a capital-intensive industry, that requires significant investments in infrastructure. Post Covid, recovery is in full swing and growth is expected to keep pace with economic conditions of the region and the amount of tourism expected to be headed to that region. More and more tourists are visiting the Mexico area due to instability abroad.

Positioning

GAP is one of the largest airport operators in Mexico, and in a growing market. Its competitive advantages include its established network of airports, long-term concession agreements, and expertise in airport management. GAP focuses on improving and expanding airports in major tourist destinations

Total Addressable Market (TAM)

The TAM for airport services in Mexico is estimated to be in the billions of USD, growing alongside the growth of tourism and business travel in the region. GAP, with its 12 airports, is well positioned to capitalize on this growing market. Airports around the world saw about $957 Billion in revenue in 2023. GAP is a small piece of that as they serve the Mexico region. However, this number is expected to rise dramatically.

Key Competitors

• ASR (ASR)
• OMA (OMA)

Competitive Landscape

GAP competes with other airport operators in Mexico and internationally. Its advantages include its strong market position in the Pacific region, long-term concession agreements, and expertise in airport management. Each group services a different location in Mexico. ASR services the Central and Northern parts of Mexico. OMA services airports in the North and Central parts of Mexico.

Montego Bay Airport (MBJ) in Jamaica

• Year: 2023
• Acquisition Price (USD millions): 159
• Strategic Rationale: Expands GAP's portfolio beyond Mexico, increasing exposure to international markets. Also to diversify location holdings.

Historical Growth: GAP has experienced consistent growth in passenger traffic and revenues over the past decade, driven by increasing tourism and business travel in Mexico. This may fluctuate depending on economic conditions and tourism.

Future Projections: Analysts expect GAP to continue growing at a moderate pace, driven by airport expansions, new commercial opportunities, and increasing air travel demand. Please refer to financial reports from the last 1-2 years for complete and current information as recent information is always fluctuating.

Recent Initiatives: Recent initiatives include expansion of existing airports, investments in new technologies, and strategic partnerships with airlines and other businesses.

Grupo Aeroportuario del Pacu00edfico shows strong market position and a strong financial record in Mexico's Pacific region due to a steady increase in passengers. They are expanding, which leads to increased revenue. Dependance on tourism and any government regulations could pose a threat to this record. Also, any natural disaster could drastically change financials.

Data Sources:

• Company Website
• Financial Reports
• Analyst Reports
• Public News Sources

Disclaimers:

This analysis is based on available information and is not financial advice. Investment decisions should be made after consulting with a qualified financial advisor. Market share estimates are approximations.