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Grupo Aeroportuario Del Sureste's CEO Discusses Q2 2011 Results - Earnings Call Transcript

In summary, this is the lack of domestic airline seat capacity. This quarter, international passenger traffic declined share of total traffic down to 57.6% from 58.8% a year ago. Passenger traffic between Mexico, Canada and the United States represented 89.2% of the total traffic compared with the 89.7% posted in the same year – in the same year ago.

Looking forward, even if Mexicana and Aviacsa reinitiate operations this year, we continue to see capacity constraints on domestic market and expect this situation to be normalized by the end of the year 2012. Of course, domestic traffic comparisons are going to be easier during the second half of this year.

On international front, we see no growth from the U.S. market, some growth from Europe and a strong growth from Canada. Consolidated revenues increased 7.1% this quarter driven by the result – by the revenue increases across the board. Including construction revenues, total revenue would have increased 5.8%.

Commercial revenues per passenger reached a record high this quarter, up 8.3% year-on-year to Ps.66.2 per passenger. Increase in commercial revenues per passenger also reflects the direct operation of 25 convenience stores this quarter compared with the 14 stores directly operated a year ago. During the quarter, we opened the last additional store of the 14th week to cover last year from the concessionaire that was in Chapter 11.

Operating costs and expenses rose 3.9% year-on-year mainly as a result of increase in construction cost. Excluding construction cost services, total operating cost would have increased by only 2.3% reflecting higher depreciation and amortization resulting mainly from the investments made since the first quarter of 2010. And expenses related to the Mérida (ph). As a result of all these EBITDA rose % this quarter with EBITDA margin up to 56.8% from the 55.3% achieved in the first quarter of 2010.

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