S&P assigns 'mxAAA' rating to Mexican airport operator GAP

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Monday, October 13, 2014

Standard & Poor's has assigned an 'mxAAA' long-term credit rating with a stable outlook to Mexican airport operator GAP.

Key ratings drivers include GAP's satisfactory risk profile reflecting the infrastructure and transport market's low risk status and the company's competitive position in the airport market, according to a report from the ratings agency.

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GAP operates 12 airports that serve different markets, making the company's revenue generation less vulnerable to slow economic growth.

The company's profitability is "above average" compared to other operators with average Ebitda margins of 67% over the past three years, although these positives are partially offset by GAP's high concentration of aeronautical revenues and its large capital investment commitments over the next five years.

Over the next three years, annual passenger traffic is expected to increase by an average of 6%, while aeronautical revenues are expected to increase by more than 7%.

Hurricane Odile, which caused the closure of Los Cabos airport for 20 days, is expected to have only a marginal impact on the Ebitda margin for the year.

To date, GAP has received 74mn pesos (US$5.52mn) from its insurers to cover the necessary repairs and Standard & Poor's expects that most of the costs will be covered by insurance.