Corporación América Airports Soars Despite Turbulent Market Conditions
Corporación América Airports (CAAP) has once again demonstrated its resilience in the face of turbulent market conditions, delivering a solid performance in the third quarter of 2024. The company's diverse geographic portfolio played a critical role in balancing its results, with strong performances in countries such as Uruguay, Brazil, and Italy helping to mitigate a weaker result in Argentina.
Revenues ex-IFRIC12 were down approximately 4% year-over-year, but revenue per passenger remained steady at $19. This is a testament to the company's ability to navigate challenging market conditions and maintain its pricing power. Adjusted EBITDA for the quarter declined in the new teens year-over-year, primarily due to ongoing macroeconomic challenges in Argentina.
However, CAAP's strong cash flow and solid balance sheet with net leverage remaining at record lows underscore its commitment to financial stability. This flexibility will enable the company to pursue growth opportunities and invest in its businesses to support long-term growth. As Martin Eurnekian, CEO of CAAP, noted during the conference call, "Our performance during the most recent quarter reflects the ongoing successful execution of our long-term strategy."
One of the key highlights from the quarter was the approval of a 124% increase in domestic passenger tariffs in Argentina. This will support CAAP's local operations going forward and provide a much-needed boost to revenue. The company also completed the acquisition of an additional 2.1% economic interest in AA2000, its Argentine subsidiary, for $30.9 million.
Passenger traffic trends were another area of focus during the conference call. Total passenger traffic declined 4% year-over-year, but this was largely driven by soft demand for domestic travel in Argentina. By contrast, international traffic in Argentina remained a bright spot, supported by additional routes and flight frequencies.
CAAP's other regions continued to perform well, with passenger traffic growing 6% in Italy, led by a 7% growth in international traffic. Uruguay also saw strong recovery, with passenger numbers up 15%, fueled by new routes and additional frequencies by JetSMART and SKY introduced in the prior quarter. Looking ahead, there are promising signs of continued growth, with SKY and LATAM Airlines announcing the resumption of routes to Rio Janeiro and Santiago de Chile for the summer season.
Overall, CAAP's performance during the third quarter of 2024 was a testament to its resilience in the face of turbulent market conditions. The company's strong cash flow, solid balance sheet, and commitment to financial stability provide a solid foundation for future growth and success."
