Los Cabos, Vallarta Airports Eye Green Bond as Tourists Return
(Bloomberg) -- The operator of airports in Los Cabos, Puerto Vallarta and other tourist destinations is planning to issue its first green bond in October, just as travelers are flocking to Mexico beaches once again.
Grupo Aeroportuario del Pacifico SAB expects to issue around 2.5 billion pesos ($123 million) in bonds, Chief Executive Officer Raul Revuelta said in an interview. The operator, known as GAP, is looking to invest in renewable energy at some of its airports as well as waste and water treatment.
Companies in big carbon-emitting industries are drawn to the borrowing structure because of its flexibility in helping them reduce their environmental footprint. Investors and analysts around the globe have raised questions about whether such securities are really green, or merely create a false impression of being environmentally sound, known as green-washing.
Revuelta said while other companies’ long-term environmental strategies are too vague, he plans to announce “very specific” green goals for the medium term.
“Investment funds increasingly want to know what companies’ ESG long-term plans are,” he said, referring to environmental, social and governance criteria. “Everybody needs to start aligning themselves with these larger efforts.”
In addition to top beach destinations, GAP operates the Guadalajara, Tijuana, Guanajuato and La Paz airports, among others.
Revuelta said the recovery in air travel from last year has been extraordinary. “As soon as they could, vaccinated Americans flew down to Mexican beaches and we’re seeing it clearly in our results.”
However, business routes are not recovering as quickly as leisure destinations, he said. GAP shares have risen 32% over the past 12 months, but they’ve fallen 3.4% this year, trailing an 18% rally in Mexico’s benchmark index over the same period.
GAP’s total investments from this year to 2025 are estimated at 30 billion pesos ($1.48 billion), Revuelta said, including 13 billion pesos in Guadalajara and 3 billion pesos in Tijuana.
The airport operator is building a new Transit Processing Building at the Tijuana airport that will allow international travelers whose final destination is in the U.S. to forgo immigration and customs in Mexico. The current Cross Border Xpress pedestrian bridge connects the Mexican airport with the San Diego side, but passengers still have to go through immigration and customs processes on each side of the border.
“Even though the plane will land in Mexico, people won’t step a foot in the country, at least legally,” Revuelta said. The new facility will help the airport attract routes from Asia and South America, he said.
Revuelta expects the new area to open in December. Though until the U.S. lifts restrictions on land border crossings due to Covid, only Americans and those with essential reasons for crossing will be able to use it.
“The restrictions are temporary,” he said. “Passengers are going to come back and we’re going to be ready for them.”
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