Q4 2006 Grupo Aeroportuario del Sureste (ASUR) Earnings Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Good morning. My name is Nathan, and I will be your conference operator today. At this time, I would like to welcome everyone to the ASUR fourth quarter earnings conference call.

[OPERATOR INSTRUCTIONS]

At this time, I will turn over the all to Mr. Adolfo Castro, CFO. Mr. Castro, you may begin.

ADOLFO CASTRO, CFO, ASUR: Thank you, Nathan. Good morning, everybody. This is Adolfo Castro, Chief Financial Officer of ASUR. Welcome to the discussion of our results for the fourth quarter 2006. Allow me to remind you that certain statements made during the course of our discussion today may constitute forward-looking statements, which are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially, including risks that may be beyond our company's control. For an explanation of these risks, please refer to ASUR's filings with the Securities and Exchange Commission and the Mexican Stock Exchange.

As expected, by the end of December, Cancun and the Riviera Maya regions reached full recovery in terms of number of hotel rooms that were there in the region before the Hurricane Wilma. On December, we restarted partial operations at Terminal 1, adding capacity for an additional 1.5 million passengers. With this addition, I am pleased to report that Cancun Airport now has enough capacity to support our winter season that has started December 15 of last year, which is comparable to the capacity prior to Hurricane Wilma.

The construction process for Terminal 3 is progressing very well. And we continue to expect that it will begin operations during the second quarter of this year. With this new terminal, we will increase the terminal capacity at Cancun Airport by 53%. Work for the second runway is also moving along. And we remain on schedule for 2008.

Let me now discuss the results for the quarter. The numbers are in yesterday's press release, so as usual, I will not go too much in detail. As expected, we reported strong passenger traffic numbers with a total passenger traffic for the quarter up by 57% year-over-year. This improvement was largely driven by the pickup in international passenger traffic, which was up 105%.

Domestic traffic also increased following the trend we saw through the year, up 22% this quarter. Passenger traffic for the fourth quarter at Cancun and Cozumel Airports was up by 105%, compared with the increase of 2.1% in the third quarter, and declines of 6.9% in the second quarter, and 24.6% in the first quarter of 2006. Traffic also benefited from the growth of 30.49% at Veracruz Airport reflecting new routes operating by local carriers.

This quarter, passenger traffic was again impacted by the ongoing public demonstrations in Oaxaca, which forced to cancel 133 flights and resulted in a 35.95% drop in passenger traffic at that airport. During the quarter, protestors continued to threaten to close the airport and block regional highways. The U.S. Department has issued several advisories regarding travel to Oaxaca. As we have mentioned before, at this moment, we are unable to predict whether or how the conflict will be resolved, or how the ongoing demonstrations may affect our operations.

Total passenger traffic rose year-over-year by 26.1%, 113% and 111% for the months of October, November and December, respectively, for passengers to and from the United States. International passenger traffic accounted for 55.2% of the total traffic of the quarter, above the 42.4% for the fourth quarter 2005, but below the 53.3% posted in the third quarter 2005 before the Hurricane Wilma. Passenger traffic between Mexico, Canada and the United States represents 83.7% of the total traffic, slightly below the 83.9% for the fourth quarter 2005. …