© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good morning, and welcome to GAP's Second Quarter 2022 Conference Call. [Operator Instructions] It is now my pleasure to turn the call over to GAP's Investor Relations team. Please go ahead.
Thank you, and welcome to the Grupo Aeroportuario del PacÃfico's Second Quarter 2022 Conference Call. Presenting from the company today, we welcome Mr. Raul Revuelta, Chief Executive Officer; and Mr. Saul Villarreal, Chief Financial Officer. Please be advised that forward-looking statements may be made during this conference call. These do not account for future economic circumstances, industry conditions, the company's future performance or financial results. As such, statements made are based on several assumptions and factors that could change causing actual results to materially differ from the current expectations. For a complete note on forward-looking statements, please refer to the quarterly report. At this point, I'd like to turn the call over to Mr. Revuelta for his opening remarks. Please go ahead, sir.
Thank you, [ Maria ], and thank you for joining us today as we discuss one of the most -- probably the most outstanding quarters in our history. The remarkable traffic as well as the recovery in performance at so many of our airports and business lines make us very optimistic for the near future, and we look forward to sharing some of these details with you today. Let me begin with a discussion on passengers traffic, which for the first half of the year reached almost 27 million passengers, an increase of 10.7% compared to 2019. If we look at the tourist destination airports, especially traffic at these locations continued to benefit from the massive market traffic. Los Cabos, Puerto Vallarta and La Paz had increases of 18.9%, 11.5% and 11.3%, respectively, when we compare this to 2019 figures. On the business driven locations, the Guadalajara Airport is showing improvement in the passengers' traffic trends. However, we have not reached 2019 levels as of yet. This is mainly because the route to Mexico City has not yet rebounded to 2019 levels given that business travelers are not back to the normal travel level. The available seats in our networks, on the other hand, have grown above our expectation at the beginning of the year, which is evidence of airlines confidence in our airport destinations. Additionally, the load factor was higher than expected despite being lower than in 2019. All these factors have generated a positive change in our guidance for this year. I'll just go back to Los Cabos for a moment to mention that this recovery was mainly driven by the cities of Tijuana and Mexico City with traffic increase of 156% and 30%, respectively. The extraordinary contribution from Tijuana is directly driven by the boom in international travelers choosing the cross border express. And the International travelers from Los Cabos, the main destination during the period under review were Phoenix, Dallas and Los Angeles with growth of carrier, 8.4%, 29.4% and 15.7%, respectively. In Puerto Vallarta, the main connecting destination were Tijuana, with an increase of 153.7%, Guadalajara with 78.7% and Monterrey with 40.7% compared to the first half of 2019. If we break it down by international travelers, in Puerto Vallarta, the flight [ to ] and from Phoenix experienced an increase of 70.3% in the first half of 2022 versus the same period of 2019. Los Angeles rose by 22.3% and Dallas by 13.7%. With regard to Canada, this market has seen a gradual recovery. However, we expect to see a lot more happening here in terms of returning to the pre-pandemic levels. In the first half of 2019, this market represented 21.4% of the airport traffic. However, as of the close of this quarter, Canada only represented 10.1% of the total share of Puerto Vallarta. But we are optimistic given the improvement in the other markets and we expect to continue trending upwards. Let's look at the Guadalajara and Tijuana airports. In Guadalajara, most of the recovery is from the domestic travelers, specifically from Tijuana and Cancun. The business travelers market, however, as we previously mentioned, continues to lag. This brings me to the demand to and from Mexico City Airport. It does show us a second recovery. However, it has been a complicated situation comparing to 2019 since Interjet, which is the top operator in December 2020, used to operate this route. Viva, Volaris and Aeromexico have taken over many of these frequencies to and from Mexico City and have experienced growth of approximately 72%, 8% and 5%, respectively. In Tijuana, our second largest airport, the tourists there so far surpassed 2019 traffic [ views ]. The most important destinations, Cancun, Mazatlan, Los Cabos and Puerto Vallarta experienced growth of 741%, 176.2%, 159.5% and 155.2%, respectively, compared to the first half of 2019. These were mainly benefited by the use of the CBX. Regarding the BFR business market in Tijuana, the route that grew the most compared to the first half of 2019 were Morelia by 52.9%, Monterrey by 20.1% and Mexico City by 18.4% and Guadalajara by 17.1%. Moving on to Montego Bay, in the second quarter, there was a solid recovery since the pandemic, representing a decrease of only 1.8% comparing to the second quarter of 2019. Currently, travel restrictions in Jamaica have been lifted and we are seeing Canadians and U.S. traffic start to rebound in this market once again. In terms of airport development, in the first half of this year, 6 national and 12 international routes opened, representing 271,000 additional seats. For the second half of the year, we expect the opening of 17 new routes, which is an additional offer of 355,000 seats. The 3 main Mexican airlines continued adding new fleets to their operations. As of July of 2022, comparing to the beginning of 2020, we've seen an approximate increase of 65 aircrafts, which represents about 9,000 additional seats of installed capacity. As a result of passenger traffic performance, aeronautical revenues increased by almost MXN 1.7 billion or about 68% versus the second quarter of 2019. For the 6 months period, aeronautical revenues increased by almost MXN 3 billion or about 57% comparing to the first half of 2019. Aeronautical revenues rose by 38% during second quarter comparing to 2019. For the 6 month period, this revenue increased by 34%. Most of the increase was driven by food & beverages, retail operations as well as duty-free. Food & beverages have the best performing period in Los Cabos, Guadalajara and Tijuana airports, while retail operations and duty-free performed particularly strongly in Los Cabos airport and Montego Bay airport. EBITDA was MXN 4 billion for the quarter with an EBITDA margin of around 72%. For the 6 month period, EBITDA reached MXN 7.8 billion with an EBITDA margin of around 73%. This was the result of the outstanding passengers' traffic recovery, higher maximum tariff and solid commercial revenues that were partially offset by the 27% increase in cost of services versus 2019. This was due to the consolidation of Kingston Airport, additional head count in most of our airports, changes in labor law, increased cost of electricity and a significant impact on inflation. While do we have a strict cost control policy, higher costs have been inevitable in accordance with the infrastructure expansion and the effect of global economy. Moving on to the balance sheet. Cash and cash equivalents increased in the first half of 2022 by 13% over 2021, reaching a total of 13.5 [Audio Gap] on the debt front. This figure reached MXN 31.1 billion in the first half of 2022, with a mix of 79% fixed rate and 21% of floating rate, 84% denominated in pesos and 15% in U.S. dollars. As of June of 2022, we reached a net debt to EBITDA ratio to the trailing 12 months of 1.2x. The company continues to employ a strategy of leveraging 100% of CapEx and refinancing 100% of maturities, reaching healthy leveraged levels as well as complying with all the covenants. CapEx continuing in accordance with the master development program commitments, and the deployment have been and will be our biggest challenge this year -- this 5-year period because of the size of the investments and high inflation. The improvements include the expansion and renovating of the airport terminal buildings in Los Cabos Airport, the second terminal in Puerto Vallarta as well as the second runway in Guadalajara. In terms of Jamaica, the renegotiation process will take place in the coming months, and we will share with you the developments when this becomes available. Before we move to the Q&A, I just want to point out that we update our guidance for the remainder of 2022 per the earnings report. And with that, I conclude my comments, and I ask the operator to please open the call for your questions.
[Operator Instructions] And we'll take our first question from Stephen Trent with Citi.
Just 2 quick ones for me, if I may. Can you remind me to what extent you might be shifting more towards alternative energy, maybe looking at using more solar panels in some places as opposed to traditional electric grid sourcing?
This is Saul Villarreal. We have already implemented different systems in our 14 airports, and we are now generating 12% of the total energy needed in the airports. In Mexico, as you may know, we have some changes in some regulations. So for now, we are still waiting for the next steps for our airports in Mexico. However, in the Jamaican airports, we are working in a second phase, and the idea is just to get on to the 30% to 40% of the electricity needed in those airports. So for now, only 12% of the total energy is generated by solar panels.
Okay. Very helpful, Saul. And just one really quick follow-up question. I know that you guys were looking at the airport auction in Barbados, which has been on and off. But could you just refresh my memory. What's the latest with that one?
Yes, Steve. We are still in the process. We are waiting for the final RFP. We received some communication from the government that they are still reviewing in order to send the final RFP. But for now, there is nothing new. So we are -- we will continue in the process, but we are waiting for that.
We will move next with Alejandro Zamacona with Credit Suisse.
My first question is on the aeronautical tariffs. So during the quarter, we saw the aeronautical revenue per working load unit way above inflation. So we were wondering what's behind this increase, as we understood that the real increases renegotiated in the last MDP was already implemented.
Well, yes, we have seen an increase in deflation applied to the tariffs. So in this quarter, it was stronger than in the previous -- in the quarter of 2021. Also, we have seen that the total reach of the maximum tariff is higher in '19 -- in this year than in 2021. So that's why you can see a little increase in the revenue per working load unit. And that's the main reason of this increase.
Okay. And then my second question, if I may, on the commercial business. I mean, even though the recovery that we have seen in the commercial activities, have you seen any structural change in the passengers' consumer spending behavior relative to what was pre-COVID?
This is Raul. I mean I will say that we are not seeing formally some kind of change of the trend of consumption, at least we are not seeing that yet. We are seeing that in some way, there is some business lines, as could be advertising, that have been changed completely after the COVID. For instance, we are, I mean, suffering for all ways related with advertising because in the middle of the pandemic and all this crisis period, a lot of the announcement goes to the Internet rather than the product advertising. So in general terms, I will say that this -- that is the only big line that has some major change. And I will say that we are seeing that the consumption in the airports, if there's the correct offer and the correct layouts, are doing great -- I mean, you could see, for instance, the food & beverage results on GAP, and is related for sure for new layouts, mainly in Cabos, summer negotiation of contracts in the case of Puerto Vallarta. But mainly is that we refresh also some of the brands. And the result is that the passengers will continue or going back to the -- what used to be the trends before the pandemic.
And we will take our next question from Lucila Gomez with Compass Group.
My question is about the increases in cost of services that has been to catch up with the inflation like maintenance and labor that has been up quarter-over-quarter. So my question is, during the next quarters, is it sustainable to maintain the cost of services at this level? Or should we expect them to continue increasing?
This is Saul. Well, the cost of service is increasing, obviously, in terms of labor, not only because of the inflation. It is also because the head count due to the ramp-up in traffic, in the dynamic that we have seen in the airports. We increased around 10% of our head count, total head count. Additionally, as you mentioned, the labor law changes represented a significant increase in terms of costs in the line of salaries. And obviously, we have to consider that the increase in salaries for the head count, it is important for GAP just to pay above of inflation. So that represents also an increase. And that's why the change and the increase that you can see in that line. In terms of maintenance, we are expecting in the second half of this year a significant increase. It's part of our economic trend year-over-year. It's part of the cycle of the company. In the first half, we have a less maintenance than in the second half. So you will see in the second half an increase in maintenance. But at the end, what we look and we try to maintain is margins. And according to our guidance, we are now changing -- increasing due to the numbers is -- will be around 71%. If you consider that the previous EBITDA margins were around 69%, 70%, so it is a very interesting number at the end.
We'll take our next question from Rodolfo Ramos with Bradesco BBI.
My question is on -- I have 2 questions. The first one is on -- if you can share with us the implicit traffic growth under your renegotiation of the MDP for this year and next year to see how it contrasts with your updated guidance? And second -- my second question is whether you can share with us how has the new international handling -- passenger handling facility in Tijuana being operating? If you have a time line of the future? Or the upcoming steps on whether to open this to new routes? Or eventually for it to be considered a domestic U.S. destination? Any color there on the upcoming steps would be helpful.
This is Saul. Well, in terms of the tariff, as you know, we negotiated with the government at the end of 2020 the new tariffs, which will be applicable for '21, '22, '23 and '24. There is no new negotiation about the maximum tariffs. So we...
Sorry, Saul, I meant traffic. So just to contrast how much above or below or on target you are versus what you renegotiated with the authorities.
Sorry. So you -- understood. Well, in terms of traffic, we are above of the negotiation. Obviously, the ramp-up of traffic and the acceleration of the recovery much better than we expected when we closed the negotiation. So we are above of that. And we are expecting that the next tariff negotiation will be -- will have a different base of traffic, which will become more difficult in terms of the -- to maintain the tariff we have. So it will be a great challenge to see if more facilities or additional CapEx could be needed. But it's interesting that for this period, we have the benefit of this additional traffic. I don't know if that answers your question.
Yes.
And sorry. This is Raul. In the case of the new building in Tijuana, as you know, we began operations there. I mean, today, the domestic traffic are -- the traffic are flying into the Mexico and coming from Mexico is using this building, and we have -- we are -- a great relief for our passengers' experience due to the fact that, as you know, we are growing on a really great and [ bigger ] space on Tijuana. So we have been -- I mean, today it is in use. A big part of the building for sure is -- it could be used not only for international traffic, but for domestic traffic. But for the case of the international traffic, we are seeing that for the first quarter of the coming year, we could talk about the opening of the first international routes in the case of Tijuana. As you remember in the 2019, we used to have the routes to Asia, to Shanghai. And in the past, we also have Guatemala and El Salvador from Volaris to Tijuana. So we are thinking that. And the way that we are working with the airlines for the announcements of news over there is that at the first quarter of the coming year we're going to see the first routes happening there, international routes.
We'll take our next question from Pablo Monsivais with Barclays.
I have 2 quick questions. The first one is on your traffic outlook for Jamaica. And to what extent the travel disruptions by staff shortages in the U.S. and Europe do you think can impact Jamaica's recovery in the third quarter? And then just out of curiosity, how is the ramp-up process of the new terminal facility in Tijuana? Remember, we were there in March. How's the traffic going? How's the commercial layout and the commercial offering building up there?
This is Saul. Regarding the traffic outlook for Jamaica, well, what we have seen is that the traffic has been progressing very positive. If you look at the trend every month, it's much, much better. Obviously, it depends of the pandemic and it depends on the lockdowns from the -- and restrictions from the different countries. But for now, we are very, very optimistic and we believe that we could reach the 2019 level before than expected 1 year ago. So for now, our expectation is very, very positive for the traffic outlook for Jamaica.
For the case -- this is Raul. For the case of Tijuana Airport facility, I will say that it has been a great success for the airport. As you remember, that new facility have, for instance, 6 additional security lines. They have almost a double capacity for checking counters. So I would say that the great recovery of the market and the great growing of passengers on Tijuana has been possible because the opening of this building. It has been completely impossible to manage this amount of passengers without this unit. So I could say that it has been a complete success. But for sure, we are expecting that for the first quarter of the coming year, we begin to see the international passengers or international routes that we expect and will be like the great additional upside for that effort. But in near terms, I will say that without this new facility, it could be completely impossible to manage the amount of passengers that we are receiving today in Tijuana. So for me, it's a complete success.
We will move next with Gabriel Himelfarb with Scotiabank.
Just 2 quick questions about the passenger profiles. Have you seen a recovery in business travel related to industrial or agricultural clusters? And can you please give us a bit of color about the new Jamaican route? Are they related to visiting family and friends? Or have you seen more leisure travel related to Jamaica?
This is Raul. I will say that the first question related with the profile, what we are seeing is an international booming on leisure travelers and also a bigger part coming from the U.S. But I will say that the growth or the recovery on the business market has still been -- is lower than the rest. We have said mainly for Guadalajara, though, that in the coming months, we begin to see a more robust trend on the growth of traffic. But let me talk or give some additional color for the Mexico City route that is the biggest route to Guadalajara, also is one of the biggest business routes in the country. I would say that in the first stage, we clearly in some way view that there was some kind of lack of demand in the route because the COVID and because the home office and because of all those trends of working from home. But in the last months what we are seeing, a lack in the offer side. We have a lack of seats. As we mentioned in the past, Interjet used to be the biggest competitor there. But what we are seeing today is really high tariffs on the route, high levels of load factors and, I would say, a lack of feed from that specific route. Given saying that, I would say that the coming months, we're going to see a recovery of number of seats from that specific route, because some of the Mexican airlines as VivaAerobus, Aeromexico or Volaris are receiving additional fleets, additional planes. And for sure, the demand is stronger enough for capturing additional seats there. So I think that in the coming months, we're going to see a great recovery in that specific market. But I would say that, even with that, there's going to be some remnants in sense of what could be some kind of effect of the home office and in some way some kind of structural change on the way that the people works and flies for business. But I will say that today, the biggest problem in our -- some of our business routes is related with the offers. For the case of Jamaica, I would say that the 2 airports have completely 2 different kinds of passengers. For sure, Montego Bay, it's mainly leisure traffic going back and forward to the -- mainly to the East Coast of the U.S. and Canada. But for the case of Kingston, it's more related to the expatriates or BFRs, Jamaicans flying back and forward to mainly New York and Miami as 2 of the most important areas of the expatriates for Jamaicans. So that will be mainly the difference on the 2 airport markets in Jamaica.
We'll take our next question from Anton Mortenkotter with GBM.
Congrats on your results. I have 2 questions. One is kind of like a follow-up to what you mentioned about opening new international routes by 1/'23. I was just wondering, does this mean that in your talks with airlines, you're expecting to recover the Category 1 safety rating from the FAA? Or these routes can be opened because it's a reopening and you already have been operating previously?
This is Raul. I will say that having -- first of all, in terms of the category, I mean, at least what is public from the FAA, from the AFAC, the regulatory -- the Mexican regulatory agency, is that they will recover at the end of this year in the category. You are saying that -- I would say that we are seeing an increase of possible frequencies and routes on international side in the coming years, mainly in the leisure markets of -- for the case of Cabos, Vallarta, Guadalajara mainly in the case of our airports that will come from U.S. carriers, because are mainly leisure. As you know, in the Mexican market, in the history of the aviation, the leisure market has been almost, I would say, 100% operated by the U.S. carriers when the start of ticket season in the U.S. And for the case of the BFR markets, are mainly operated by Mexican carriers. That will be the history and that will continue. So what we will see in the coming years is that the growing for Cabo, Vallarta, Guadalajara, when talking about leisure or business, would be completely covered by the U.S. carriers. But for the case of the BFR market, it could be -- in some way jeopardize the additional growth of the Mexican markets -- of the Mexican carriers in the BFR market if there is no recovery of the category. Saying that, we have a great part in our airport that is in Tijuana and CDX Airport, because one of the things that we are seeing is that at least what is related to the South California market, Volaris, VivaAerobus and even Aeromexico are absorbing part of the market that they could not attack from -- to Los Angeles or further -- of this South California market through Tijuana, through the CDX. So in general terms, we could say that at least on the case of the BFR market that are generating South California, we could see that it will be an additional capturing of markets and additional capturing of passengers if the category is not recovering yet. But we expect that this thing -- of the category, it could be solved for the Mexican government in the coming 6 months.
That's pretty clear. And my second question was kind of related to that, talking about the increasing capacity that you're seeing from airlines. And then this -- all of these dynamics accelerating. In your thoughts with them, have you seen them also accelerating the orders for new aircraft or something like this?
I mean, both -- in the case of Mexican airlines, for instance, the 3 main airlines have -- Volaris, VivaAerobus and Aeromexico have made public their orders for additional planes. I would say that the 3 airlines have posted really aggressive plans for the coming 5 years that will -- in some of the cases, almost double their capacity in the coming 5 years. So I would say that at least in terms of the plans are really aggressive for the coming years, and we are really positive about that. But in the really short term, we have seen also that some of the -- for instance, Aerobus are having problems for recovering their capacity for production of planes. So just a couple of weeks ago, for instance, VivaAerobus didn't receive in time one of the planes that have planned to receive from this year -- on this month, and was due to the fact that Aerobus had some delays on the manufacturing of the plane. So I will say that in the long term, we are really optimistic about the new planes and the new fleet and the plans for the -- mainly for the Mexican airlines. But I will say that in the really, really short term, in the next quarters, I will say, we will be seeing stalling, with some problems of the manufacturing in planes and delay in some of the deliveries from the -- from mainly Airbus and Boeing for some of the Mexican carriers.
We'll go to our next question from [ Ogo Bisera ] with GBM.
Congratulations on the report. I have 2 questions regarding commercial revenue. I would like to understand how much of it comes from fixed and how much comes from variable income? And my second question is regarding CapEx distribution deployment. How much went to non-aero and how much went to the NBP?
Sorry. Can you please get close to the mic and repeat your question because the sound is not good? Sorry.
Sorry. I will repeat my question. Can you hear me better now?
Yes, please.
Yes. Okay. So I would like to ask regarding the commercial revenue. How much of it comes from fixed and how much comes from variable income? And my second question comes from CapEx distribution. How much went to non-aero and how much went to the NBP?
This is Saul. Well, regarding the commercial revenue, as we have said and we have mentioned, our general contract has a mix of minimum rental fee and the revenue share. Right now and after the pandemic, we are almost back to the levels of 2019. At that time, we had around -- 95% of the total revenues was over the variable and only 5% above fixed. However, due to the pandemic, this distribution changed. And right now, it's around 80% -- 85% of the total revenues comes from the royalties that we receive from the commercial tenants. So it is in general, because we have also -- regarding the contracts, because due to the business lines that we manage directly as advertising, parking lots, convenience stores, those -- all those revenues are variable, all right? So in general, regarding the contracts, it's around 85% fixed -- sorry, variable and 15% fixed. In terms of the CapEx distribution, I would say that according to the MXN 3 billion that we have deployed so far in 2022 as of June, we have around 90% from the master plan and 10% only of commercials.
We'll take our next question from Alan Macias with Bank of America.
Just -- and thank you for the update on the 2002 (sic) [ 2022 ] guidance. I just have a question on it. The driver for traffic growth between the lower range and the upper range, is that GDP growth assumptions behind that? Is that the main driver? And also, at this point in time, could you provide what you're thinking about traffic growth for 2023 given inflation headwinds, lower economic growth headwinds, strong peso headwinds, also strong U.S. dollar headwinds, meaning that U.S. tourists might prefer other destinations than Mexico?
According to the guidance, we have a range of passenger traffic 14% to 20%. So we increased to 26% to 30%. And it doesn't come from the GDP. It comes basically according to the seats available in the market, the load factors and the pipeline that the airline has in terms of fleet. So according to that and the trend of growth in our airports, we are adjusting the guidance. It's not related with the GDP.
Saul, the question is, in your new guidance, you have a traffic growth of 26%, the lower range, and 30%, the upper range. What's driving the difference between that growth of...
Mainly the opening of new routes. That is the key factor there. Because at the end of the day, I mean, we need to have some kind of range because -- I mean even that we have some -- we have, say, deals or announcements or -- with the airlines of the opening. And sometimes, they don't have the plane or they don't have the deliveries from the manufacturer or these kind of things. It could -- it's not like an exact time of opening. So we always need to work with some kind of range. And talking about your second question of how -- how is our view of 2023. I would say that are 3 factors -- in general terms, I would say that we are, in general terms, optimistic. But there are 3 factors to take into account for what could be 2023. The first, for sure, is related with the oil price. That is, as you know, the biggest cost or the most important cost for an airline. That is still high or higher than we have seen in the last months. Even that is decreasing in the last week. But if we're still seeing a really high cost of oil, we're going to see the airlines having to pass through the cost to the passengers, and in that case, the demand will suffer. So the first and most important would be how will be the oil cost for the coming years. But also, we have the delivery of planes for the case of Mexico. It's really aggressive the plan for the 3 airlines, for Viva, Aeromexico and Volaris. So if the plan fully -- if we'll see a complete fulfillment of the original plans, we're going to see a great amount of seats in the market. And third is related with the opening of new key routes on the leisure destinations of Cabo, Guanajuato or even Montego Bay, that -- if we have that specific opening of new key routes, we're going to see also an interesting increase on passengers. So I will say in general terms, we are still really -- we are really optimistic on the coming year. For sure, we know that the GDP forecasting for the case of Mexico is now more optimistic [ plan ], and I would say it's still being more in the type of the flatter growth. But even with that, we see that the major assets is still having a lot of room to grow. And if the cost of the oil is the correct one and we see the Mexican peso rising, we're going to see a great 2022 year.
Understood. Very helpful. Just one other question. Do you have the percentage of traffic of Mexican airlines that fly to the U.S., just to determine the exposure if Mexico doesn't recover the Category 1?
I mean, depending on the airline. But because -- I mean, there's -- for instance, Mexico have the international passenger go -- they have [ overall ] and Canadian and South American markets. But talking about VivaAerobus and Volaris, we are saying that the Mexican -- the domestic market would be around 60%, 65% of the passengers. So I mean [indiscernible] because Tijuana Airport, because a lot of that passengers are U.S. market, but flying from Mexican market. But in terms of general terms -- in general terms, I would say that would be something around 65% on the Mexican market.
[Operator Instructions] And it appears that we have no further questions at this time. I will now turn the call back to the management team for their closing remarks.
Thank you, everybody, again, for joining us today in our second quarter results conference. We want to remind you that we are always available to answer any questions. On behalf of GAP, we wish you a great day.
And this does conclude today's program. Thank you for your participation. You may now disconnect.