Grupo Aeroportuario del Sureste SAB CV (NYSE:ASR), or ASUR, continues to benefit from its concession to operate the Cancun airport, which drives the bulk of its traffic and growth. A record 21.4 million passengers passed through that airport last year, up 9.3% year over year, accounting for 75% of the company's total traffic. With additional capacity expansions on the way, that key location should continue to drive the company's earnings higher.

ASUR's results: The raw numbers


Q4 2016

Q4 2015

Year-Over-Year Change

Total passenger traffic

7.1 million

6.3 million


Total commercial revenue per passenger




Earnings per share




Data source: Grupo Aeroportuario del Sureste, S.A.B. de C.V.

What happened with ASUR this quarter? 

Traffic at Cancun continues to grow:

  • Domestic traffic rose at all but two of the company's airports during the fourth quarter, with Cozumel and Minatitlan the only weak spots, though they accounted for just 2.6% of total traffic. Meanwhile, Cancun did most of the heavy lifting as traffic rose 19.5% to 1.8 million passengers during the quarter, which was 52% of ASUR's domestic traffic.
  • Cancun was the star of the show internationally, accounting for 95% of traffic during the quarter. Overall, 3.4 million international passengers passed through that airport, up 9.4% from the year-ago quarter due in part to last year's expansion of Terminal 3.
  • Thanks to the fixed-cost nature of its operating model, ASUR continues to leverage its traffic growth to capture more revenue per passenger, which was up 8.7% year over year. That said, if there was one weak spot, it was company's directly operated convenience stores where revenue was only up 5.9% year over year to $15.76 per passenger.
  • Total operating costs dropped 1.4% year over year, primarily due to an 11.4% decrease in construction costs and a 2.8% drop in administrative expenses. Those declines more than made up for a 28.9% increase in the cost of services from the Terminal 3 expansion and higher cost of sales from the directly operated convenience stores.
Distance shot of Cancun shoreline.

Image source: Getty Images.

What's driving this growth?

One way ASUR leverages traffic growth is by adding new commercial spaces to provide more goods and services to travelers. For example, last year in Cancun the company opened 10 new food and beverage, retail, and banking locations. Overall, these new locations helped drive a 21.4% increase in commercial revenue on just an 11.9% jump in traffic.

Looking forward 

ASUR recently completed its Terminal 3 expansion, which added six new gates that will increase the passenger traffic capacity of that terminal from six million to 10 million. The company also remains on pace to complete the first phase of Terminal 4 within the next year, which should increase its overall capacity by another 9 million more passengers.

That said, growing hostility between the U.S. and Mexico could cause some more turbulence for ASUR and fellow Mexican airport peers Grupo Aeroportuario del Pacifico (NYSE:PAC) and Grupo Aeroportuario del Centro Norte (NASDAQ:OMAB). The stock prices of all three companies are down since election day and could continue to bounce around if tensions grow worse. One potential headwind is if President Trump makes good on his promise to renegotiate NAFTA, which could result in less air travel between the neighboring nations. ASUR appears to be better insulated against this risk than its rivals since its primary airport is a tourist destination, but it is something to monitor.

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