OMAB: Navigating Mexico's Travel Recovery with VINCI's Wings

The global travel rebound has been uneven, but Mexico's aviation sector is roaring back. At the heart of this recovery sits Grupo Aeroportuario del Centro Norte (OMAB), the operator of 13 key airports in Mexico's high-growth northern and central regions. With a 6.9% year-on-year jump in May 2025 passenger traffic, driven by a 19.5% surge in international arrivals, OMAB's recent performance underscores its position as a prime beneficiary of Mexico's tourism boom. But how does this growth align with its strategic repositioning under VINCI Airports, and what does it mean for investors?

The Traffic Surge: Domestic Stability, International Momentum

OMAB's May results reveal a 10.6% year-to-date (YTD) traffic growth through May 2025, with domestic traffic up 5.1% and international traffic +19.5%. This isn't just about post-pandemic rebound—it's a reflection of structural demand. Mexico's northern airports, such as Monterrey and Chihuahua, are hubs for U.S. cross-border travel, while central airports like León and Querétaro serve booming manufacturing corridors.

The international growth is particularly telling. With U.S.-Mexico travel volumes nearing pre-pandemic levels and business activity picking up, OMAB's airports are positioned to capture both leisure and corporate demand. This aligns with broader trends: Latin America's air traffic grew 13.9% in April 2025, outpacing all regions except Africa.

VINCI's Play: Global Scale Meets Local Know-How

Since its acquisition by VINCI Airports (the world's largest private airport operator) in late 2022, OMAB has gained two critical advantages:
1. Capital Access: VINCI's global network provides funding for modernization projects, such as solar energy infrastructure and terminal expansions.
2. Operational Synergy: VINCI's expertise in efficiency metrics—think reduced wait times and better concession revenue—has already boosted OMAB's margins.

The proof is in the numbers: OMAB's adjusted EBITDA margin expanded to 74.4% in the 12 months ending March 2025, up from 73.7% in 2024. Meanwhile, its non-aeronautical revenue (hotels, warehouses, etc.) grew to $321.9 million, diversifying its cash flows.

Valuation and Technicals: A “Buy” With Caution

Investors might note that OMAB's shares have risen +709% since its 2006 IPO, far outpacing the MEXBOL Index's +116% gain. Yet, Spark's AI analysis warns of overbought conditions, with the stock trading near its 52-week high. Analysts are split: one firm rates it a "Sell" with a $71.50 price target, while others see it as "Outperform" due to strong fundamentals.

The technical risk is clear—momentum could reverse if travel demand cools. But OMAB's low leverage (debt/EBITDA of ~3x) and ESG commitments (e.g., 92% reduction in Scope 1&2 emissions per passenger) add a layer of resilience.

Risks on the Horizon

• Cost Pressures: Rising fuel and labor costs could squeeze margins.
• Regulatory Headwinds: Mexico's new passenger rights policies and potential tax reforms could affect revenue models.
• Macro Uncertainties: A U.S. recession or currency volatility (MXN/USD) could dampen cross-border travel.

Investment Thesis: Buy for Mexico's Travel Story

Despite the risks, OMAB offers compelling upside for investors willing to bet on Mexico's structural travel recovery. Key positives:
- Portfolio Quality: Its 13 airports include 8 of Mexico's top 10 fastest-growing markets by passenger traffic.
- VINCI's Backing: Access to global best practices and capital ensures long-term growth.
- Valuation: At a 16.8x EV/EBITDA multiple, it's cheaper than peers like GAP (20.5x) and ASUR (18.9x).

While near-term overbought conditions suggest pausing at current highs, a buy-and-hold strategy for 12–18 months aligns with Mexico's travel trajectory. The YTD 10.6% traffic growth and sustainable ESG initiatives further justify optimism.

Final Call: Investors seeking exposure to Mexico's aviation rebound should consider OMAB. The stock's risks are manageable, and its strategic advantages with VINCI make it a standout play in a sector with tailwinds.

Data as of June 2025. Past performance is not indicative of future results. Consult a financial advisor before making investment decisions.