During the Third Quarter 2023 Results Conference Call, ASUR's CEO, Adolfo Castro, discussed the potential impact of recent regulatory changes on its operations and finances. The company also reported a record high of 17.6 million passengers in the third quarter, along with a 3% increase in revenues.
Key takeaways from the call:
- The Mexican Federal Civil Aviation Agency amended the Tariff Base Regulation, and the lower house of the Mexican Congress approved an increase in the concession fee from 5% to 9%. ASUR is assessing these changes and their implications.
- ASUR reported a record high of 17.6 million passengers in Q3, with mixed traffic trends by country.
- Revenues increased by over 3% to just over MXN6 billion, driven by growth in aeronautical and non-aeronautical revenues in Mexico.
- The company maintained a strong balance sheet and plans to pay an extraordinary cash dividend of MXN10 per share in November.
- ASUR is adjusting its Master Development Plan (MDP) in accordance with the new regulations and is not planning any legal action at this time.
- Castro discussed the potential impact of Pratt & Whitney engine issues on Volaris and Viva airlines, stating that the recall of 3,000 engines could affect around 1,500 airplanes worldwide.
- In terms of traffic, Puerto Rico has seen strong growth due to a new ultra-low-cost carrier, while Colombia's traffic is expected to recover from the suspension of two airlines in February 2023.
ASUR (BMV:ASURB) is currently adjusting its MDP document to comply with the new regulations and is still evaluating the full impact of the concession fee increase. The company expects the Pratt & Whitney engine issue to have some impact on traffic next year, particularly for Volaris.
In response to questions about the duration of Puerto Rico's growth and the potential impact of the Tulum Airport on charter traffic and the joint maximum tariff, Castro noted that these factors are uncertain and will depend on various market dynamics.
During the call, Castro also discussed the potential impact of the Mexican strong peso on commercial revenue, particularly in duty-free and activities related to foreign visitors. He noted a decrease in international travel to and from Europe and South America, offset by a slight increase in traffic to and from the US and Canada.
Regarding the new regulatory document, Castro stated that it is enforceable and will be applied before the end of the year. He also clarified that they are not in talks with the government about extending the concession, and they are currently in the middle of the original 50-year term.
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