Airport operator Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (PAC) is facing a difficult time owing to Hurricane Odile, which lashed across Baja California on Monday.
The Category 3 tropical storm caused severe damage and left thousand of passengers stranded amid heavy rainfall and steep winds.
Grupo Aeroportuario, which operates twelve airports in Mexico, had to suspend its flights from the Los Cabos and La Paz airports. The government owned company is currently evaluating the extent of damage caused by the hurricane.
The high-intensity hurricane knocked down trees, billboards, vehicles, homes and even affected roads. Electricity service was also grounded as the storm damaged transmission lines, distribution lines and generation plants.
However, the storm lost velocity somewhat as it crossed land, although threats of heavy shower still remain. The government is preparing a rescue operation, using military and commercial aircraft. Notably, there are 30,000 tourists trapped in La Paz and Los Cabos, 26,000 of them being foreigners.
Few days back, the Guadalajara-based company reported strong traffic results for the month of Aug 2014. Total terminal passengers increased 4.4% as compared to the same period last year. A 14.8% rise in international passengers drove the strong results.
However, two of the biggest Mexican airline companies, namely Aero Mexico and Controladora Vuela Compa (VLRS)-owned Volaris have reassigned some of their capacity to other destinations .This could potentially affect Grupo Aeroportuario’s traffic numbers. We believe a prolonged stay on operations in these two airports could further dent its traffic figures, going forward.
Grupo Aeroportuario currently carries a Zacks Rank #3 (Hold). Two Zacks Rank #1 (Strong Buy) stocks worth mentioning within this sector are Southwest Airlines Co. (LUV) and Hawaiian Holdings Inc. (HA).
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