Airports revenue soars to $17b
Despite recovery, income still below pre-pandemic levels
Published:Wednesday | March 23, 2022 | 12:08 AM
At its peak in 2019, just before the COVID-19 pandemic, the Sangster International Airport in Montego Bay, with annual traffic of 4.7 million passengers, earned upwards of US$108 million or $16.6 billion for its Mexican owner Grupo Aeroportuario Pacifico, GAP, which translates to Pacific Airport Group. That was before the 2020 travel downturn and massive revenue falloff. Figures for 2021, recently released, show a continued climb back in passenger numbers, pushing income to US$76.5 million or around $11.7 billion for Montego Bay, which up to recently accounted for about 15 per cent of GAP’s revenues from 14 airports.
Although the company does not break out in its consolidated financials, revenues for Kingston’s Norman Manley International Airport, which it also operates, Financial Gleaner calculations place combined revenues from the two airports for 2021 roughly on par wih the pre-pandemic numbers for Montego Bay alone. In regulatory filings to the US Securities Exchange Commission last month, GAP said it used an exchange rate of 20.2813 pesos, the currency it reports in, to one US dollar, for its calculations of the financials of its Jamaica operations.
The Jamaican airports, operated by GAP subsidiaries MBJ Airports Limited in Montego Bay and PAC Kingston Airport Limited, PACKAL, in Kingston, generated about US$110 million, the equivalent of $17 billion, in combined revenue over the 12 months to December 2021, reflecting a major recovery after 2020’s big economic fallout in the wake of the pandemic. The Jamaican businesses brought in 1.69 billion pesos, about US$83 million or $12.7 billion in 2020 and 2.41 billion pesos, which is US$119 million or $18.3 billion in 2019, according to figures from GAP’s 2020 annual report.
But the recovery does not promise a smooth sailing, with the outlook as at last month signalling some possible slowing down of traffic ahead.
“Domestic traffic continues to strengthen at our 12 Mexican airports as airlines continue to gradually increase their operations. However, international traffic declined due to new requirements put in place to enter the United States, as well as the suspension of flights from Mexico and the Caribbean by the government of Canada,” GAP said of its 2021 operations and financial performance.
During the final quarter of the year, there was additional airlift into Jamaica, including from Frontier Airlines, which added three new routes in Montego Bay from Orlando, Newark and Atlanta in the USA. Charter operator EW Discover added one route originating from Frankfurt, Germany to Montego Bay. In Kingston, American Airlines added a new route from Philadelphia in the USA. The management of MBJ Airports did not immediately respond to Financial Gleaner queries about the 2022 outlook.
The airports’ revenues include income from aeronautical services, such as airline landing fees and non-aeronautical services including food concession and parking charges.
The airports in Jamaica are dependent on international travel while GAP’s Mexican airports rely mainly on domestic travel.
In terms of passengers, at the tourist gateway at Sangster International, total passengers increased 60 per cent to 2.58 million in 2021 compared to 1.6 million in 2020, but was down 45 per cent relative to 2019 pre-pandemic levels of 4.7 million, the parent company reported. In Kingston, passengers numbers increased by 32 per cent to 830,500 in 2021, compared to 629,400 in 2020. Total passengers count at both international airports over 2021 was 3.4 million, up from 2.23 million in 2020, but still a far way off from the 5.1 million passengers both airports recorded in 2019.
The company said it conducted a stress test in the September quarter which confirmed operational improvements and concluded that none of its airports were likely to suffer write-downs from reduced usefulness.
“In this evaluation, the company reviewed financial results for the short, medium, and long term, concluding that a significant deterioration of the company’s assets is not expected. As such, the company does not foresee a business interruption or closing operations at any of its airports,” GAP said in its September quarterly report.
The Montego Bay-based airport is the third busiest airport in the Caribbean region, excluding Cuba, in terms of commercial aviation passenger traffic, according to Airports Council International.
In April 2015, GAP acquired 100 per cent of Desarrollo de Concesiones Aeroportuarias, S.L., which owned a majority stake in MBJ Airports Limited. Then in October 2018, GAP entered into a concession agreement for the operation of the Norman Manley International Airport. That agreement took effect a year later in October 2019.