Mexican airport operator GAP seeing strong demand trends

Grupo Aeroportuario del Pacifico (GAP), which operates several airports in Mexico including Guadalajara and Tijuana, again reported strong traffic and demand during Q1. The company published earnings last week, delivering a generally bullish outlook, albeit clouded by some uncertainties about proposed political reforms and economic conditions. Mexico has been one of the strongest airline markets in the world both during and after the pandemic. That’s in part thanks to the appeal of popular tourist resorts like Cancun but also economic momentum tied to nearshoring, the phenomenon in which manufacturers are moving production from Asia to places closer to the US. According to GAP, Guadalajara’s passenger volumes rose 23% in Q1 of 2023, compared to the same quarter of 2019. Tijuana’s growth was a remarkable 54%. GAP also runs airports in beach towns like Puerto Vallarta and Los Cabos. Guadalajara happens to be Mexico’s third busiest airport after Mexico City and Cancun, based on 2022 passenger volumes. Tijuana is now number four, surpassing Monterrey. During its Q1 call, GAP executives expressed concern about government policy proposals but optimism about Mexico regaining Category I safety classification from the US FAA, enabling more flights. The upgrade should come in the third or fourth quarter, GAP said. In the meantime, the company is opening a second runway at Guadalajara later this year. It’s also building a new terminal for Puerto Vallarta.<br/>