Unlocking Value at Corporación América Airports Amidst Air Traffic Resurgence

Corporación América Airports is a unique platform well-positioned to capture value in a recovering and growing global air traffic market. The company operates in several countries with a diverse portfolio of airports, and its recent expansion into the US market presents opportunities for growth. Despite perceived risks, the company's real value is trapped, and investors should consider its potential.

Following the successful launch of Allegiant airline service on May 21, Gulf Shores International Airport (GUF/JKA) is already looking to the future as the Airport Authority has begun exploring the potential expansion of the terminal to support growing passenger demand [1].

As part of this planning effort, the Authority has entered a contract with Vasey Aviation Group to evaluate a design for terminal enhancements. If pursued, the improvements would include expanding the gate area, increasing curbside space, and enlarging baggage claim facilities. A final decision on whether to move forward with any construction, including how any expansion would be funded, is expected later this fall [1].

Jesse Fosnaugh, GUF airport director, stated, “Believe it or not, we are already pursuing the idea of expanding our terminal facility, and this next phase could carry us forward for years to come. Staying ahead of the airlines is important. They make schedule decisions six to nine months in advance, and being in front of that planning curve is essential. Residents and visitors expect convenient travel and low fares, and we intend to make that integral to any terminal concepts” [1].

The Airport Authority has also approved LuLu’s as the first official food and beverage provider for the airport terminal. Known for its family-friendly atmosphere and coastal cuisine, LuLu’s will provide a warm Gulf Shores sendoff to every traveler through expanded dining services and retail offerings beyond security screening [1].

“LuLu’s is targeting a soft opening in late July,” said Lucy Buffett, owner of LuLu’s. “We want everyone who has enjoyed our great destination to keep the vacation going a bit longer while at the airport and provide them a ‘last chance’ of LuLu’s unique hospitality and Gumbo Love” [1].

The expansion plans at Gulf Shores International Airport come at a time when the global aviation industry is experiencing strong growth. According to Boeing, passenger air traffic more than tripled and the global airplane fleet more than doubled in the first quarter of this century. Looking ahead over the next 20 years, this trend is expected to continue with strong demand for new airplanes as consumers prioritize air travel and passenger traffic more than doubles, outpacing global economic growth [2].

Emerging markets will play an outsized role in this global air travel growth, driven by an expanding middle class, dynamic and competitive airline networks, and sustained aviation investment. The global fleet will nearly double to add capacity and replace most of the airplanes currently in service, which will improve fleet efficiency and capability [2].

These developments suggest that Gulf Shores International Airport is well-positioned to capture value in a recovering and growing global air traffic market. The airport's expansion plans, coupled with the growing demand for air travel, present opportunities for growth and investment.

References:
[1] https://www.gulfcoastmedia.com/stories/gulf-shores-international-airport-plans-possible-terminal-expansion-lulus-joins-as-dining,274654
[2] https://www.boeing.com/commercial/market/commercial-market-outlook