Viva México! Spotlight on Grupo Aeroportuario del Pacífico (GAP)

CEO, Raúl Revuelta Musalem, tells Joe Bates more about Mexico’s Grupo Aeroportuario del Pacífico (GAP) and the ambitious development plans for its airports.

Can you tell us a little more about your airport network?

We operate 12 airports in the Pacific region of Mexico and two in Jamaica – Sangster International Airport in Montego Bay and Kingston’s Norman Manley International Airport.

Our airports in Mexico include Tijuana, Guadalajara, Los Cabos and Puerto Vallarta. Guadalajara is Mexico’s dynamic second city. Tijuana is a vibrant city and the airport is located on the US border with San Diego. Los Cabos and Puerto Vallarta are world-class vacation destinations in Mexico. La Paz and Manzanillo are smaller vacation destinations in Mexico. Aguascalientes, Guanajuato, Morelia, Hermosillo and Mexicali are medium size cities with traditionally strong business, VFR and leisure traffic.

Between them our domestic airports account for 32% of all airport passengers handled in Mexico, and that figure will rise this year as our group has led the country’s
recovery from COVID.

In Jamaica, GAP has a controlling 74.5% interest in MBJ Airports Limited, which operates Sangster International Airport, and since October 2019, we have been responsible for the operation and development of Norman Manley International Airport. When GAP signed the 25-year concession agreement for the airport with the Jamaican government it pledged to invest $100 million on modernising and expanding the airport terminal over the next five years.

So, looking at our airport portfolio, I think it is safe to say that we primarily serve growing cities and resorts and that we host airlines of all business models from many countries.

What airport is the jewel in the crown of GAP’s airport system and why?

Stakeholders at several of our airports would make a case that they are the crown jewel, but if I have to name only one, it would be Guadalajara’s Miguel Hidalgo International Airport (GDL).

The airport serves Mexico’s second largest metropolitan area and has a catchment area of 16 million people, all within a two-hour drive of GDL.

Unknown to many people outside of Mexico, this great region is home to a growing IT industry, and a leading centre for high tech manufacturing, medical equipment and supplies, conventions and expositions and tourism.

The town of Tequila is close to Guadalajara and Puerto Vallarta is less than three hours away by car. Investment in the electronics manufacturing industry across the region has totalled more than $14 billion over the last 15 years.

GDL is a gateway to nearby states in Mexico that host automotive, aerospace, agribusiness and other global industries. This diversified, international economy supports a large middle class that generates significant outbound travel, as well as inbound business, leisure and VFR travel.

Growth in Guadalajara has been robust due to organic demand and the stimulation caused by Mexican and foreign low-cost carriers.  Due to the international profile of the regional economy, GDL is also Mexico’s second largest cargo airport, hosting 17 dedicated freighter airlines.   

Can you tell us more about the development plans for Guadalajara?

We are investing close to $750 million on upgrading the existing terminal and the addition of a new terminal and second runway to ensure that the airport is equipped to meet future demand as passenger numbers at GDL have more than doubled since 2009, reaching an all-time high of 14.8 million in 2019.

When the new, second terminal opens by 2026, the airport will have 125,700sqm of terminal space – a 140% increase vs today. The new runway will be 3,500-metres long and capable of handling long-range aircraft such as the Boeing 777-300ER and Airbus A350-900. We are also constructing a multi-purpose building that will house the 12,000sqm Hilton Garden Inn Hotel.

What is the overall development strategy for your airports?

Increasing the capacity of our airports is the main driving force behind all of our investments. During 2020, we successfully revised the Master Development Program (MDP) for our Mexican airports, which will now involve an investment of 15.8 billion Mexican Pesos for the period 2020-2024.

All the projects that were previously agreed upon with the authorities in the old MDP remain, however, the initiation and termination timeframes will change. The main projects planned between now and 2024 are:

• A second runway and terminal expansion at Guadalajara Airport
• A new terminal processor building at Tijuana Airport to complement the existing Cross Border Xpress (CBX) handling passengers transferring between Mexico and the US
• A new terminal building in Puerto Vallarta Airport
• Expansion of the existing terminal at Los Cabos Airport
• Investment in new equipment and technology, including new touch-free systems, across the entire network
• Airside maintenance across the network.

The new terminal processor building at Tijuana will enable transit passengers to pass through it without being processed by the Mexican authorities, making the whole procedure faster and more efficient. We hope that this development will help make Tijuana a hub, attracting more flights from Asia and Latin America for US bound passengers.

What impact has COVID-19 had on traffic levels at your airports and where is Mexico today in terms of its recovery from the pandemic?

If you look at IATA’s June 2021 data for our biggest airports, compared to June 2019, traffic levels at Los Cabos are up by 15% in total and by 21% for international traffic. And it is not alone as Tijuana was also up 10% in total.  The picture wasn’t quite so bright for Guadalajara, which saw its overall traffic total fall by 14%, but this can be explained by the grounding of Interjet, which had a significant presence at the airport.

Elsewhere, Puerto Vallarta’s traffic total grew by 3%, boosted by a 11% upturn in the international arena. On the whole, GAP’s Mexican operation was just 2% below 2019, with international traffic up 8%, a significant rise on two years ago.

In terms of Mexico’s recovery from COVID, our country’s borders remained open to international visitors throughout the pandemic, and many Americans took advantage of that for an escape to their favourite beaches. In the reverse direction, many Mexicans have been flying to the United States to get their COVID vaccinations as for some it is easier to get it there than at home.

How has COVID impacted on your plans to expand the international route networks from your Mexican airports?

What we see is that airlines are exploring new opportunities more seriously than before COVID, and this can only have a positive impact on our efforts to attract new air services to our focus areas of China, South Korea, Japan, Europe and Latin America.

The Guadalajara region has been ready for services by a European hub carrier since before the pandemic, and we are now in active discussions about this opportunity. The region’s economy is very international in its make-up and is already home to an impressive number of European companies, which help generate the business traffic that full-service network carriers are looking for. Indeed, the GDL region generates significant outbound travel for both business and leisure and the state of Jalisco and others nearby offer a variety of destinations for inbound vacationers who want to experience Mexico’s history, culture, food and scenery. 

From our perspective, we know that several European hub carriers serve destinations in Latin America with smaller populations and GDPs than Guadalajara’s, so our challenge is getting the airlines to understand this opportunity.

We are particularly interested in China, Japan and South Korea as trade and travel between Mexico and Asia have been growing rapidly in recent years, fuelled by a number of new scheduled passenger and cargo services.

GAP is actively discussing potential new air service opportunities in Tijuana with a number of Asian carriers. Tijuana hosts a vibrant manufacturing industry comprised primarily of Asian companies, a situation that creates business traffic to/from Asia.

When it comes to Latin America, Copa Airlines currently serves both Guadalajara and Puerto Vallarta, ensuring passengers rapid onward connections to destinations in Latin America and the Caribbean via its vast network. However, we believe that there is potential for services to the region from other GAP airports and continue to target new opportunities. Tijuana and Los Cabos, for example, are prime examples of airports that would benefit from services by a Central American hub carrier.

Can you tell our readers a little more about how the cross-border terminal in Tijuana works and how the airport benefits from its existance?

The Cross Border Xpress (CBX) is a visionary project that takes advantage of the proximity of the Tijuana International Airport (TIJ) to the US-Mexico border. It’s only a few feet away.

TIJ has always served as a gateway between Southern California and Mexico, but the experience was flawed by the long lines at the ground crossings between the two countries. The CBX was built as an additional airport ‘lobby’ on the US side of the border, connecting to the TIJ terminal by a pedestrian walkway over the border. Ticketed passengers pay a modest fee to cross the border using CBX and avoid the border lines. This makes travelling predictable and quick. The US side offers parking and transport and will soon offer other amenities. Passengers to the States pass through US Immigration and Customs on the US side of the walkway and vice versa for Mexico.

The CBX has been a huge success story for TIJ. Prior to its 2015 opening, the airport handled just over four million passengers per year. This had more than doubled to 8.9 million in 2019, during which time customer satisfaction levels have soared and Aeromexico as well as Mexican ULCCs Volaris and VivaAerobus have commenced operations to Tijuana. Sometimes it is easy to forget that passengers flying to TIJ can be in downtown San Diego within 25 minutes of passing through the CBX.

What do you consider to be GAP’s greatest challenges and opportunities today?

As with any business, the challenge is to anticipate changes in the business and be prepared for them. Airports require large capital investments and long lead times for expansion and modification, so it’s important to get things right.