UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington,WASHINGTON, D.C. 20549

FORM 20-F

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)15(D) OF

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 20072010

Commission File Number: 001-32751

Grupo Aeroportuario del Pacífico, S.A.B. de C.V.

(Exact name of registrant as specified in its charter)

Pacific Airport GroupUnited Mexican States

Avenida Mariano Otero No. 1249-B

Torre Pacífico, Piso 6

Col. Rinconada del Bosque

44530 Guadalajara, Jalisco

Mexico

(Address of principal executive offices)

Torre Pacífico, Piso 6

Col. Rinconada del Bosque

44530 Guadalajara, Jalisco, Mexico

References in this annual report on Form 20-F to “dollars,” “U.S. dollars” or “U.S.$” are to the lawful currency of the United States of America. References in this annual report on Form 20-F to “pesos,” “Mexican pesos” or “Ps.” are to the lawful currency of Mexico. We publish our audited consolidated financial statements and all other financial information contained herein are presented in constant pesos with purchasing power as of December 31, 2007, unless otherwise noted.

Procedures used at the close of 2007 to recognize the effects of inflation in terms of purchasing power were as follows:

Balance sheets:

Statements of income:

Other statements:

Recent changes affecting inflation accounting:

MFRS has changed for periods beginning in 2008, and the inflation accounting methods summarized above will no longer apply unless the economic environment in Mexico qualifies as “inflationary” for purposes of MFRS. The environment is inflationary if the cumulative inflation rate equals or exceeds an aggregate of 26% over three years (equivalent to an average of 8% in each year). Because of the relatively low level of Mexican inflation in recent years, and based on current forecasts, we do not expect the Mexican economic environment to qualify as inflationary in 2008 or 2009, but that could change depending on actual economic performance.

As a result, we expect to present financial statements without inflation accounting beginning in 2008.pesos.

This annual report on Form 20-F contains translations of certain peso amounts into U.S. dollars at specified rates solely for the convenience of the reader. These translations should not be construed as representations that the peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the ratesrate indicated. Unless otherwise indicated, U.S. dollar amounts have been translated from Mexican pesos at an exchange rate of Ps. 10.9169 per12.3825 to U.S. dollar,$ 1.00, the noon buying rate for pesos on December 30, 2010, as published by the U.S. Federal Reserve Bank of New YorkBoard. On June 10, 2011 the exchange rate for transfers in Mexican pesos on December 31, 2007.

References in this Form 20-Fas published by the U.S. Federal Reserve Board was Ps. 11.8668 to “dollars,” “U.S. dollars” or “U.S.U.S.$ “ are to the lawful currency of the United States of America. References in this Form 20-F to “pesos,” “Mexican pesos” or “Ps.” are to the lawful currency of Mexico. We publish our audited consolidated financial statements in pesos.1.00.

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This annual report on Form 20-F contains references to “workload units,” which are units measuring an airport’s passenger traffic volume and cargo volume. A workload unit currently is equivalent to one terminal passenger or 100 kilograms (220 pounds) of cargo. When we refer to “terminal passengers” we mean the sum of all arriving and departing passengers on commercial and general aviation flights, other than transit passengers. “Transit passengers”, or “through passengers,” are those who are generally not required to change aircraft while on a multiple-stop itinerary and who generally do not disembark their aircraft to enter the terminal building. When we refer to “total passengers”passengers,” we mean the sum of terminal passengers and transit passengers. When we refer to “commercial aviation passengers,” we mean the sum of terminal and transit passengers, excluding general aviation passengers, such as those on private non-commercial aircraft. Country-wide data for Mexico presented herein are based on commercial aviation passengers, but we generally measure our operations based on terminal passengers.

This annual report on Form 20-F contains references to “air traffic movements” which represent the sum of all aircraft arrivals and departures of any kind at an airport.

On January 1, 2010, we adopted Interpretation to Financial Reporting Standards 17, or INIF 17,Service Concession Contracts. INIF 17 was issued by Consejo Mexicano para la Investigación y Desarrollo de Normas de Información Financiera, A.C. (Mexican Board for Research and Development of Financial Reporting Standards, or “CINIF”). INIF 17 arose from the need to provide clarification on the accounting treatment to be followed for service concession contracts for services that are considered public in nature.

INIF 17 requires that the infrastructure of a service concession contract falling within its scope not be recognized as property, plant and equipment. It also requires that revenues earned from a concession operators’ performance of both construction or upgrade services and operating services under a single contract be recognized according to each type of service provided, based on the fair value of consideration received at the time the service is rendered. Once quantified, revenues should follow the relevant recognition criteria taking into account the nature of the service rendered. Accordingly, when the operator of a concession provides construction or improvement services, revenues and costs associated with such services should be recognized using the percentage-of-completion method while revenues from operating services should be recognized as services are rendered. INIF 17 also references the supplemental application of International Accounting Standard 18,Revenues. The effects of recognition of this interpretation were applied prospectively in our consolidated financial statements, as required by the interpretation.

Although the adoption of INIF 17 did not change the accounting treatment of the concession assets and related additions and improvements in our consolidated balance sheet, it did result in the recognition of construction revenues and costs with respect to the additions and upgrades undertaken at our airports. Under our concession agreements, through the Master Development Programs agreed with the Mexican government every five years, we are committed to carry out various improvements, upgrades and additions to each of our airports on an annual basis. In exchange for investing in those additions and upgrades, the Mexican government grants the Company the right to obtain benefits for services provided using those assets. This represents an exchange of dissimilar goods or services whereby we receive an intangible asset for the construction services we provide, rather than an actual cash exchange. Exchanges of dissimilar services are considered transactions that generate revenues and thus should be measured at the fair value of the goods or services received, or those given up, if the former cannot be measured reliably. Through a bidding process, the Company hires third parties for the construction of the additions and upgrades. Accordingly, we recognize the revenues for these construction services as the amounts paid to those third parties, considering those amounts to be representative of the fair value of the services, given the unreliability of estimating the goods or services received in exchange. As a result of the foregoing analysis, in 2010 we recognized revenues from improvements to concession assets and an equal amount of costs of improvements to concession assets.

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Although these revenues do not equate to actual cash inflows, financial reporting standards require their recognition, as revenue generation is inherent in an exchange of dissimilar services, similar to barter transactions.

In reviewing this annual report, you should take into account the fact that certain margin and ratio calculations that utilize “Total revenues” or “Total operating costs” will reflect the adoption of INIF 17 as of January 1, 2010, while previous periods will not reflect INIF 17. Consequently changes in total revenues, total operating costs, EBITDA margin, operating margin, total revenues per terminal passenger and other ratios included in this annual report, as well as other ratios potentially useful to investors, may not be comparable between periods. In those instances we have included a parenthetical notation with comparable amounts or measures. Nominal results for amounts used in calculating certain margins, such as operating income, are not affected by the adoption of INIF 17 and are comparable.

Furthermore, in several sections of this annual report we take into account only revenues that resulted in actual cash inflows (which we categorize as aeronautical and non-aeronautical revenues, or the sum of the two) for ratios or comparative calculations. Both of these categories of revenues are dependent, either directly or indirectly, on passenger traffic, while revenues generated from improvements to concession assets under INIF 17 are not dependent upon passenger traffic, but rather stem from the level of capital expenditures carried out at each airport. Information reported using only revenues that generated cash inflows may be more useful for readers of this annual report because those revenues stem from the key drivers of our business, passenger traffic and our maximum tariffs. The use of aeronautical and non-aeronautical revenues is more common in our industry as they represent the revenues generated from our core operations, that being services provided to passengers, airlines and other third parties based on passenger traffic at our airports. Accordingly, these revenues are a better indicator of revenues that directly affect our cash flows. As previously indicated, revenues from construction services for improvements to concession assets represent exchanges of goods and services rather than actual cash inflows for the services provided. Additionally, because aeronautical and non-aeronautical revenues are earned based on the key drivers of our business, passenger traffic and maximum tariffs, they are the most accurate indicator of the profitability of our operations; however, we do not earn a profit from construction services for improvements to concession assets (see “Item 4,Information on the Company – Regulatory Framework – Classification of Services Provided at Airports” for a discussion of the airport services categories and aeronautical services regulation). When analyzing the health of our operations, we consider our operating margin, which we calculate using only aeronautical and non-aeronautical revenues, given the lack of profitability generated from construction services. Accordingly, we believe that analysis and discussion of aeronautical or non-aeronautical revenues separately, in certain instances, from revenues from improvements to concession assets is important in order to provide you with a better understanding of our company. We clearly indicate each instance in which we use only aeronautical and non-aeronautical revenues by indicating the category of revenues used.

The summary financial and other information set forth below reflects our financial condition, results of operations and certain operating data for the periods indicated.

		Year ended December 31,
		2003			2004			2005			2006			2007			2007
		(thousands of pesos) (1)															(thousands of dollars) (2)
Basic and diluted earnings per share before cumulative effect of change in accounting principle		Ps. 0. 6190			Ps. 0.7219			Ps. 1.2678			Ps. 1.6542			Ps. 2.5000			U.S. $	0.2290
Basic and diluted earnings per share generated by cumulative effect of change in accounting principle		Ps. 0.0000			Ps. 0.0483			Ps. 0.0000			Ps. 0.0000			Ps. 0.0000			U.S.$	0.0000
Basic and diluted earnings per share(10)		Ps. 0.6190			Ps. 0.7702			Ps. 1.2679			Ps. 1.6542			Ps. 2.5000			U.S.$	0.2290
Basic and diluted earnings per ADS(10)		Ps. 6.1905			Ps. 7.7020			Ps. 12.6790			Ps. 16.5425			Ps. 25.5000			U.S.$	2.3358
Dividends per share(11)		Ps. 0.5368			Ps. 0.5644			Ps. 2.0249			Ps. 1.3802			Ps. 2.0884			U.S.$	0.1913
Dividends per ADS(11)		Ps. 5.3682			Ps. 5.6443			Ps. 20.2494			Ps. 13.8024			Ps. 20.8840			U.S.$	1.9130
U.S. GAAP:
Revenues		Ps. 2,130,862			Ps. 2,439,199			Ps. 2,766,163			Ps. 3,039,294			Ps. 3,486,430			U.S.$	319,361
Income from operations		1,102,122			1,271,770			1,540,412			1,595,564			1,975,322				180,941
Consolidated net income		572,496			(129,263	)		959,348			1,141,292			1,756,760				160,921
Basic earnings per share(10)		1.0282			(0.2322	)		1.7230			2.0498			3.1551				0.2890
Diluted earnings per share(12)		1.0205			(0.2322	)		1.7101			2.0344			3.1315				0.2868
Basic earnings per ADS(10)		10.2820			(2.3215	)		17.2300			20.4978			31.5510				2.8901
Diluted earnings per ADS(12)		10.2049			(2.3215	)		17.1011			20.3442			31.3150				2.8685
Other operating data :
Total terminal passengers (thousands of passengers)(13)		16,444			17,516			19,135			20,514			23,565				23,565
Total air traffic movements (thousands of movements)		382			390			415			446			509				509
Total revenues per terminal passenger(14)		Ps. 130			Ps. 140			Ps. 146			Ps. 148			Ps. 148			U.S.$	14
Balance sheet data:
MFRS:
Cash and cash equivalents		Ps. 1,147,386			Ps. 1,326,353			Ps. 845,712			Ps. 931,109			Ps. 1,426,683			U.S.$	130,685
Total current assets		1,672,002			1,731,841			1,382,491			1,707,940			2,313,484				211,918
Airport concessions, net		19,311,519			18,914,522			18,483,014			18,051,504			17,619,994				1,614,011
Rights to use airport facilities, net		2,783,516			2,683,533			2,583,549			2,483,565			2,383,582				218,339
Total assets		26,406,378			26,632,317			26,283,952			26,475,100			27,526,277				2,521,437
Current liabilities		113,776			207,322			251,158			276,734			600,352				54,992
Total liabilities		120,460			230,958			307,303			344,738			1,164,712				106,689
Total stockholders’ equity(15)		26,285,919			26,401,358			25,976,649			26,130,362			26,361,565				2,394,129
U.S. GAAP:
Cash and cash equivalents		971,741			1,056,289			845,712			931,109			1,426,683				130,686
Total current assets		1,828,167			1,874,521			1,392,973			1,719,498			2,342,739				214,597
Assets under concession (“Rights to use airport facilities” under MFRS)		2,663,141			2,535,380			2,407,618			2,279,855			2,152,093				197,134
Total assets		13,105,630			12,790,108			12,743,850			13,212,582			14,622,023				1,339,393
Current liabilities		113,776			207,690			258,820			290,453			598,267				54,802
Total liabilities		126,979			241,783			356,272			410,216			1,208,751				110,723
Total stockholders’ equity(15)		12,978,651			12,548,325			12,387,577			12,802,366			13,413,272				1,228,670
Other data:
MFRS:
Net resources provided by operating activities		Ps. 637,572			Ps. 1,756,434			Ps. 1,559,611			Ps. 1,525,469			Ps. 2,020,236			U.S.$	185,056
Net resources used in financing activities		(301,159	)		(316,655	)		(1,135,979	)		(774,311	)		(593,045	)			(54,324	)
Net resources used in investing activities		(349,570	)		(806,015	)		(634,210	)		(665,760	)		(931,617	)			(85,337	)
Increase (decrease) in cash and cash equivalents		(13,158	)		633,765			(210,578	)		85,397			495,574				45,395
U.S. GAAP:(16)
Net cash provided by operating activities		493,962			1,228,912			1,536,515			1,531,671			1,938,034				177,526
Net cash used in investing activities		(349,570	)		(790,572	)		(593,041	)		(649,195	)		(807,504	)			(73,968	)
Net cash used in financing activities		(301,159	)		(316,655	)		(1,135,979	)		(774,312	)		(593,045	)			(54,324	)
Effect of inflation accounting		(32,035	)		(37,137	)		(18,073	)		(22,767	)		(41,911	)			(3,839	)
Increase (decrease) in cash and cash equivalents		(188,802	)		84,548			(210,578	)		85,397			495,574				45,395

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EXCHANGE RATES

The following table sets forth, for the periods indicated, the high, low, average and period-end free-market exchange rate between the peso and the U.S. dollar, expressed in pesos per U.S. dollar. The average annual rates presented in the following table were calculated using the average of the exchange rates on the last day of each month during the relevant period. The data provided in this table is based on noon buying rates published by the Federal Reserve Bank of New York for cable transfers in Mexican pesos. We have not restatedpesos for the years ended December 31, 2005 through December 31, 2008. The Federal Reserve Bank of New York discontinued the publication of foreign exchange rates on December 31, 2008, and therefore, the data provided for the periods beginning January 1, 2009, are based on the rates published by the U.S. Federal Reserve Board in constant currency units.its H.10 Weekly Release of Foreign Exchange Rates. All amounts are stated in pesos.pesos and have not been restated in constant currency units. We make no representation that the Mexican peso amounts referred to in this annual report could have been or could be converted into U.S. dollars at any particular rate or at all.

Sources: Federal Reserve Bank of New York and Federal Reserve Board.

Source:On June 10, 2011, the exchange rate for pesos was Ps. 11.8668 per U.S. $1.00 as published by the U.S. Federal Reserve Bank of New York.

In recent decades, the Mexican Central Bank (Banco de México) has consistently made foreign currency available to Mexican private-sector entities (such as us) to meet their foreign currency obligations. Nevertheless, in the event of shortages of foreign currency, there can be no assurance that foreign currency would continue to be available to private-sector companies or that foreign currency needed by us to service foreign currency obligations or to import goods could be purchased in the open market without substantial additional cost.Board.

Fluctuations in the exchange rate between the peso and the U.S. dollar affect the U.S. dollar value of securities traded on the Mexican Stock Exchange (Bolsa Mexicana de Valores, S.A.S.A.B. de C.V.), and, as a result, will likely affect the market price of our American Depositary Shares, or ADSs. Such fluctuations may also affect the U.S. dollar conversion by The Bank of New York, the depositary for our ADSs, of any cash dividends paid by us in pesos.

On June 23, 2008, the Federal Reserve Bank of New York’s noon buying rate was Ps. 10.2970 per U.S. $1.00.

For a discussion of the effects of fluctuations in the exchange rates between the peso and the U.S. dollar, see “Item 10. Additional Information—Exchange Controls.”8

RISK FACTORS

Risks Related to Our Operations

A global economic and financial crisis may affect our business.

The global economic and financial crisis that began in 2007 and continued through 2009 led to high volatility and lack of liquidity in the global credit and other financial markets. The downturn in the U.S. and global economies led to increased commercial and consumer delinquencies, lack of consumer confidence, decreased market valuations, increased market volatility, high financial risk premiums and a widespread reduction of business activity generally. These conditions also limited the availability of credit and increased financial costs for companies around the world, including in Mexico and the United States. Although economic conditions improved in 2010 and the availability of credit increased while interest rates remained stable, a failure of the global economy to continue recovering or another recession could significantly affect our ability to access credit to finance our future projects, therefore adversely affecting our business.

Our revenues are highly dependent on levels of passenger and cargo traffic volumes and air traffic, which depend in part on factors beyond our control.

Our revenues are closely linked to passenger and cargo traffic volumes and the number of air traffic movements at our airports. These factors directly determine our revenues from aeronautical services and indirectly determine our revenues from non-aeronautical services. Our principal source of aeronautical services revenues is passenger charges. Passenger charges are payable for each passenger (other than diplomats, infants and transfer and transit passengers) departing from the airport terminals we operate and are collected by the airlines and paid to us. In 2008, 2009 and 2010 passenger charges represented 65.3%, 64.0% and 56.1% respectively, of our total revenues (in 2010, passenger charges represented 66.0% of the sum of our aeronautical and non-aeronautical revenues).

Passenger and cargo traffic volumes and air traffic movements depend in part on many factors beyond our control, including economic conditions in Mexico and the United States, the political situation in Mexico and elsewhere in the world, public health crises, the attractiveness of the destinations that our airports serve relative to thatthose of other competing airports, fluctuations in petroleum prices, (which can have a negative impact on traffic as a resultdisruptions of fuel surcharges or other measures adopted by airlines in response to increased fuel costs)global debt markets and changes in regulatory policies applicable to the aviation industry. Any decreases in air traffic to or from our airports as a result of factors such as these could adversely affect our business, results of operations, prospects and financial condition.

OurNegative economic developments in Mexico could reduce domestic passenger traffic at our airports, which would adversely affect our business could be adversely affected by a downturn in the U.S. economy.and results of operations.

In 2007, 95.8%Although a substantial portion of our revenues is derived from foreign tourism, Mexican domestic passengers in recent years have represented approximately two-thirds of the international passengers served bypassenger traffic volume in our airports arrived or departed on flights originatingairports. In addition, all of our assets are located, and all of our operations are conducted, in or departing to the United States. Thus,Mexico. Because our business isrevenues are largely dependent on the level of passenger traffic in our airports, any decline in domestic traffic could have an adverse effect on our business, results of operations, prospects and financial conditions. Therefore, if inflation or interest rates increase significantly or the Mexican economy is otherwise adversely impacted, our business, financial condition and results of operations could be materially and adversely affected because, among other things, domestic demand for transportation services may decrease. For more information on the U.S. economy,ongoing recession in Mexico, see “– Risks Related to Mexico – Adverse economic conditions in Mexico may adversely affect our financial condition or results of operations” in this section and “Item 5,Operating and Financial Review and Prospects – Recent Developments – Economic Downturn.”

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Our business is particularly influenced bysensitive to economic conditions and other developments in the United States.

Our business is particularly sensitive to trends in the United States relating to leisure travel, consumer spending and international tourism. EventsIn 2010, 91.0% of the international terminal passengers served by our airports arrived and conditionsdeparted on flights originating in or departing primarily to the United States.

Thus, our business is highly dependent on the condition of the U.S. economy and events affecting the U.S. economy may adversely affect our business, results of operations prospects and financial condition. TheIn 2009 the U.S. gross domestic product decreased at an annualized rate of 2.4%, but it improved in 2010, increasing at an annualized rate of 2.8%. Therefore, although the U.S. economy has recently experienced and continuesshown signs of improvement, if the U.S. economy fails to experience an economic slowdown that may negatively affect our results of operations. If this slowdown becomescontinue improving or if it falls back into a prolonged economic crisis,recession, it willwould likely have a material adverse effect on our results of operations due to decreased passenger traffic travel to and from the United States.

Other trends and developments in the United States may also adversely impact the frequency and pattern of our international passenger traffic. For example, any development that could make travel to and from the United States less attractive to our passengers, including legislative developments related to immigration policy in the United States, could negatively affect the level of passenger traffic in our airports, which may adversely affect our business, financial condition or results of operations.

Levels of passenger and cargo traffic volumes and air traffic at our airports are highly sensitive to the impact on airlines of international petroleum prices and access to credit.

Our revenues are closely linked to passenger and cargo traffic volumes and air traffic movements at our airports, which are determined by the operating levels of airlines at our airports. Airlines’ costs are highly sensitive to the price of petroleum and their access to credit to finance their operations. Increased costs may increase ticket prices and reduce fleets, thereby decreasing flight frequencies and negatively impacting passenger and cargo traffic volumes.

International petroleum prices have experienced significant volatility in the recent past, reaching record highs in the third quarter of 2008. Although prices have remained below the highs of 2008, the price of fuel is subject to further fluctuations resulting from a reduction or increase in output of petroleum, voluntary or otherwise, by oil-producing countries, other market forces, a general increase in international hostilities, or any future terrorist attacks. Increases in airlines’ costs as a result of higher petroleum prices may lead to higher ticket prices, cancellations of routes and decreases in frequencies of flights, and may decrease demand for air travel generally, which may reduce passenger and cargo traffic at our airports.

Most airlines also depend on reliable access to credit at interest rates they can afford to finance their fleet of aircraft and make other large investments. As evidenced by the recent global recession and financial crisis, high interest rates and disruptions in the global debt markets had an adverse effect on airlines’ ability to operate their fleets, forcing many to raise ticket prices, cancel routes, decrease the frequencies of flights or forego scheduled investments. Such reductions in operations by airlines has led to lower passenger and cargo traffic volumes at our airports, which has had an adverse impact on our results of operations.

See “–The loss of or suspension of operations by one or more of our key customers could result in a loss of a significant amount of our revenues” below for a more detailed description of which of our major airline customers have recently reduced or cancelled operations at our airports.

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Our business is highly dependent upon revenues from four of our airports and could be adversely impacted by any condition affecting those airports.

In 2010, approximately 82.1% of the sum of aeronautical and non-aeronautical revenues was generated from four of our 12 airports. The following table lists the percentage of the sum of aeronautical and non-aeronautical revenues generated at our airports in 2010:

As a result of the substantial contribution to our aeronautical and non-aeronautical revenues from these four airports, any event or condition affecting these airports could have a material adverse effect on our business, results of operations, prospects and financial condition.

Competition from other tourist destinations could adversely affect our business.

The principal factor affecting our results of operations and business is the number of passengers using our airports. The number of passengers using our airports (particularly our Los Cabos International Airport and our Puerto Vallarta International Airport) may vary as a result of factors beyond our control, including the level of tourism in Mexico. In addition, our passenger traffic volume may be adversely affected by the attractiveness, affordability and accessibility of competing tourist destinations in Mexico, such as Cancun and Acapulco, or elsewhere, such as Hawaii, Puerto Rico, Florida, Cuba, Jamaica, the Dominican Republic and other Caribbean islands and destinations in Central America. The attractiveness of the destinations we serve is also likely to be affected by perceptions of travelers as to the safety and political and social stability of Mexico, particularly as a result of the uncertainty and safety concerns resulting from the government’s ongoing effort against drug cartels. There can be no assurance that tourism levels, and therefore the number of passengers using our airports, in the future will match or exceed current levels. A reduction in tourism to the destinations served by our airports could directly and indirectly affect our revenues from aeronautical and non-aeronautical services.

International events, including acts of terrorism, wars and global epidemics, could have a negative impact on international air travel.

International events such as the terrorist attacks on the United States on September 11, 2001, resultedwars such as the one in a significant declineIraq and public health crises such as the Influenza A/H1N1 epidemic have negatively affected the frequency and pattern of air travel worldwide in passenger traffic worldwide and futurerecent years.

As with all airport operators, we are subject to the threat of terrorist attacks could result in similar declines.

attacks. The terrorist attacks on the United States on September 11, 2001 had a severe adverse impact on the air travel industry, particularly on U.S. carriers and on carriers operating international servicesservice to and from the United States. Airline traffic in the United States fell precipitously after the attacks. Our terminal passenger volumes declined 1.4% in 2001 and an additional 5.3% in 2002 (in each case as compared to the prior year). Any

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future terrorist attacks, whether or not involving aircraft, will likely adversely affect our business, results of operations, prospects and financial condition.

In April 2009, Mexico, as well as several other countries, was affected by an outbreak of Influenza A/H1N1. As a result of the outbreak, a number of countries, including the United States, Great Britain and France, advised against nonessential travel to Mexico, although these advisories had been lifted by the end of May 2009. While we cannot completely isolate the impact on travel of the advisories and restrictions imposed by national and international governments from other potential factors such as the economy, our domestic passenger traffic and international passenger traffic declined by 33.3% and 43.7%, respectively during May 2009 (in each case compared to May 2008). A new outbreak could once again disrupt our operations and significantly affect passenger and cargo traffic levels.

Because our revenues are largely dependent on the level of passenger traffic in our airports, any general increase of hostilities relating to reprisals against terrorist organizations, further armed conflict around the world, outbreaks of health epidemics or other events of general international concern (and any related economic impact of such events) could result in decreased passenger traffic and increased costs to the air travel industry and, as a result, could cause a material adverse effect on our business, results of operations, prospects and financial condition.

If a change in relations with our labor force should occur, such a change could have an adverse impact on our results of operations.

Although we currently believe we maintain good relations with our labor force, if any conflicts with our employees were to arise in the future, including with our unionized employees (which accounted for approximately 49.5% of our total employees as of December 31, 2010), resulting events such as strikes or other disruptions that could arise with respect to our workforce could have a negative impact on our results of operations.

Security enhancements following the events of September 11, 2001 have resulted in increased costs and future security enhancements could further increase our costs and reduce our operating margins.may expose us to greater liability.

The air travel business is susceptible to, and has experienced, increased costs resulting from enhanced security and higher insurance and fuel costs.insurance. Following the events of September 11, 2001, we reinforced security at our airports. While enhanced security at our airports has not resulted inAs a significant increase in our operating costs to date, we may be required to adopt additional security measures in the future. In addition,result, our general liability insurance premiums for 2002 and 2003 increased substantially relative to our 2001 premiums, and we cannot predict whether there may continue to risebe additional increases in the future. In 2004, our aggregate insurance cost was more than double our aggregate insurance cost for 2001. Since August 1, 2003, we have carried a Ps. 500 million insurance policy covering damages to our property resulting from terrorist acts. Since January 2003, we have carried an insurance policy covering personal and property damages to third parties resulting from terrorist acts. The coverage provided by this policy was initiallysince 2007 is U.S.$ 10 million, but was increased to U.S.$ 150 million in 2007.million. Because our insurance policies do not cover all losses and liabilities resulting from war or from terrorism, we could incur significant costs if we were to be directly affected by events of this nature. Any such increase in our operating costs would have an adverse effect on our results of operations.

The users of airports, principally airlines, have been subject to increased costs since the events of September 11, 2001. Airlines have been required to adopt additional security measures and may be required to comply with more rigorous security rules or guidelines in the future. Premiums for aviation insurance have increased substantially and could escalate further. While governments in other countries have agreed to indemnify airlines for liabilities they might incur resulting from terrorist attacks, the Mexican government has not done so and has given no indication of any intention to do so.the same. In

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addition, fuel prices, supplies and supplies,interest rates for airlines’ aircraft lease agreements, which constitute a significant cost for airlines using our airports, may be subject to increases resulting from any future terrorist attacks, a general increase in international hostilities or a reduction in output of fuel, voluntary or otherwise, by oil-producingoil producing countries. Such increases in airlines’ costs have in the past resulted in higher airline ticket prices and decreased demand for air travel generally, thereby having an adverse effect on our revenues and results of operations. In addition, because a substantial majority of our international flights involve travel to the United States, we may be required to comply with security directives of the U.S. Federal Aviation Authority, in addition to the directives of Mexican aviation authorities.

In 2005, the Mexican government issued a policy letter (carta de política) calling for all checked baggage on international commercial flights beginning in January 2006, and on domestic commercial flights beginning in July 2006, to undergo a new comprehensive screening process. Because of uncertainty over the policy letter’s implementation, the new screening process has been delayed. In particular, the policy letter does not specify which parties should bear responsibility for the new screening process. Although the Mexican Airport Law specifiesexpressly provides that airlines bear the responsibility for baggage screening, the fact that the policy letter is silent as to responsibility has caused some of our airline customers to contend that the policy letter’s intent is for airport concessionaires, such as us, to bear responsibility for the new screening process. In addition, certain questions have been raised regarding the constitutionality of the new screening process. The Mexican Bureau of Civil Aviation is expected to issue regulations

implementing the policy letter, but these may not address the questions of responsibility and constitutionality that have been raised. We maintain that the new policy will not be implemented at our airports until we enter into a written agreement with our airline customers regarding the allocation of cost and responsibility.

The new process is expected to require the installation of new screening equipment and that baggage be checked manually if the equipment signals the potential presence of prohibited items. In December 2009 the Company signed a supply contract with Rapiscan Systems for the purchase and installation of new baggage screening equipment which is expected to be complete during 2011. To date, the installation has been completed in 6 of our 12 airports. Although we incurred significant capital expenditures installing this screening system, we believe that the operation of this equipment is the responsibility of our airline customers under the Mexican Airport Law. We are currently in negotiations with theDirección General de Aeronáutica Civil(Civil Aeronautics Division or “DGAC”) and the airlines to determine responsibility for operating the equipment and the allocation of costs. If it is determined that it is our responsibility to operate the screening systems or that we are required to purchase, install and operateresponsible for part of the new screening equipment, this could increasecost, our exposure to liability. liability could increase.

We also expect to incur ongoing expenses to maintain any equipment purchased, and we could be required to undertake significant additional capital expenditures to purchase thefor items such as a new screening technology or additional equipment, and incur ongoing expenses to maintain the equipment we have purchased, which could restrict our liquidity and adversely affect our results of operations.

International events could haveWhile enhanced security at our airports has not resulted in a negative impact on international air travel.

Historically, a substantial majority of our revenues has been derived from aeronautical services, and our principal source of aeronautical services revenues is passenger charges. Passenger charges are payable for each passenger (other than diplomats, infants and transfer and transit passengers) departing from the airport terminals we operate, and are collected by the airlines and paid to us. In 2005, 2006 and 2007, passenger charges represented 65.4%, 65.1%, and 67.2%, respectively, of our total revenues. Events such as the war in Iraq and public health crises such as the Severe Acute Respiratory Syndrome, or SARS, crisis in 2003 have negatively affected the frequency and pattern of air travel worldwide. Because our revenues are largely dependent on the level of passenger trafficsignificant increase in our airports, any general increase of hostilities relatingoperating costs to reprisals against terrorist organizations, further conflictdate other than as mentioned above, we may be required to adopt additional security measures in the Middle East, outbreaks of health epidemics such as SARS or other events of general international concern (and any related economic impact of such events) could result in decreased passenger traffic and increased costs to the air travel industry and, as a result, could cause a material adverse effect on our business, results of operations, prospects and financial condition.future.

Our revenues and profitability may not increasebe adversely affected if we fail in our business strategy.

Our ability to increase our revenues and profitability depends in part on our business strategy, which consists of setting prices in order to be as close as possible to our regulatory maximum rates for any given year, reducing operating costs, controlling our capital expenditure commitments under our Master Development Programs with the Mexican government, increasing passenger and cargo traffic at our airports and increasing revenues from commercial activities.

Our ability to increase our commercial revenues is significantly dependent, among other factors, upon increasing passenger traffic at our airports and on our ability to renegotiate rental agreements with

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our tenants to provide for contractual terms more favorable to us. Our ability to increase revenues from commercial activities is also dependent on our ability to continue the remodeling and modernization of the commercial areas we operate within our airports. We cannot assure youprovide assurance that we will be successful in implementing our strategy of increasing our passenger traffic or our revenues from commercial activities. The passenger traffic volume in our airports depends on factors beyond our control, such as the attractiveness of the commercial, industrial and tourist centers that the airports serve. Accordingly, there can be no assurance that the passenger traffic volume in our airports will increase or that our profitability will increase.

A claim against us by a construction company relating to work at the Guadalajara airport could have a negative resolution.

In August 2005, we entered into a construction contract with Grupo de Ingeniería Universal, S.A. de C.V., or GIUSA, for the development of a new segment of the Guadalajara International Airport’s apron. GIUSA delayed the project and we therefore executed the performance bond posted by GIUSA in an amount equal to 20% of the total contract value. However, we were not able to obtain such execution because, in September 2006, GIUSA initiated legal proceedings against us, claiming breach of contract by us and seeking the full contract amount and additional damages, together totaling Ps. 43 million. During 2007, we obtained a favorable sentence in first instance, which was appealed by GIUSA. As of the date of our consolidated financial statements, the resolution of this appeal is still pending.

Competition from other tourist destinations could adversely affect our business.

The principal factor affecting our results of operations and business is the number of passengers using our airports. The number of passengers using our airports (particularly our Los Cabos International Airport and our Puerto Vallarta International Airport) may vary as a result of factors beyond our control, including the level of tourism in Mexico. In addition, our passenger traffic volume may be adversely affected by the attractiveness, affordability and accessibility of competing tourist destinations in Mexico, such as Cancún and Acapulco, or elsewhere, such as Puerto Rico, Florida, Cuba, Jamaica, the Dominican Republic and other Caribbean islands and destinations in Central America. The attractiveness of the destinations we serve is also likely to be affected by perceptions of travelers as to the safety and political and social stability of Mexico. There can be no assurance that tourism levels, and therefore the number of passengers using our airports, in the future will match or exceed current levels, the failure of which could directly and indirectly affect our revenues from aeronautical and non-aeronautical services, respectively.

Our business is highly dependent upon revenues from four of our airports and could be adversely impacted by any condition affecting those airports.

In 2007, approximately 78.3% of our revenues were generated from four of our 12 airports. The following table lists the percentage of total revenues generated at our airports in that year:

As a result of the substantial contribution to our revenues from these four airports, any event or condition affecting these airports could have a material adverse effect on our business, results of operations, prospects and financial condition.

If a change in relations with our labor force should occur, such a change could have an adverse impact on our results of operations.

Although we currently believe we maintain good relations with our labor force, if any conflicts with our employees were to arise in the future, including with our unionized employees (which accounted for 52.5% of our total employees at December 31, 2007), resulting events such as strikes or other disruptions that could arise with respect to our workforce could have a negative impact on our results of operations.

The loss of or suspension of operations by one or more of our key customers could result in a loss of a significant amount of our revenues.

Consorcio Aeroméxico,Concesionaria Vuela Compañía de Aviación, S.A. de C.V., or ConsorcioVolaris; Grupo Aeroméxico, (controlled by the Mexican government until October 2007)S.A.B. de C.V., isor Grupo Aeroméxico, a holding company that owns Aeroméxico one of the principal domestic airlines operating at our airports. Of the total revenues generated at our airports in 2007, Aeroméxico and Aeroméxico Connect (formerly AerolitoralAerolitoral); Grupo Mexicana, a holding company that owns Mexicana, Mexicana Click and also owned by Consorcio Aeroméxico) togetherMexicana Link (these airlines suspended operations on August 28, 2010); and ABC Aerolíneas S. A. de C.V., or Interjet; accounted for 15.31%13.5%, while Grupo Mexicana (composed12.7%, 7.6% and 4.2%, respectively, of Mexicana de Aviacióntotal revenues in our airports in 2010 (15.9%, 14.9%, 8.9% and Click Mexicana), which until December 2005 was owned by4.9% respectively, of the government,sum of aeronautical and which is now owned by Grupo Posadas S.A. de C.V., represented 12.01%non-aeronautical revenues generated in our airports in 2010).

None of our contracts with our airline customers obligate them to continue providing service to our airports, and we can offer no assurance that, if any of our key customers reducedreduce their use of our airports, competing airlines would add flights to their schedules to replace any flights no longer handled by our principal airline customers. During 2007, Banamex acquired both AeroméxicoFor example, on August 2, 2010, Mexicana, one of Mexico’s two largest carriers and Aeroméxico Connect.previously an airline which was among our three largest customers in terms of passenger traffic, filed for bankruptcy protection in Mexico and in the United States. On August 28, 2010, Mexicana, Mexicana Click (formerly known as Aerovías Caribe) and Mexicana Link (formerly known as Mexicana Inter)(collectively “Grupo Mexicana”) ceased operations. Mexicana Click and Mexicana Link filed for bankruptcy protection on September 7, 2010. In 2010, Grupo Mexicana was still our third largest carrier and accounted for 8.9% of the sum of aeronautical and non-aeronautical revenues generated in our airports. Since Grupo Mexicana ceased operations, approximately 36.4% of the available seats that it flew have been taken over by other airlines, and, consequently, passenger traffic levels at our airports have been recovered since the date that Grupo Mexicana ceased operations. We can offer no assurance that thesecompeting airlines will operate independently in the future or that they will continuewould seek to useincrease their flight schedules if any of our key customers reduced their use of our airports. Decisions made

Furthermore, passenger charges, which accounted for 56.1% of our revenues in 2010 (66.0% taking into account only the sum of aeronautical and non-aeronautical revenues), are collected by Banamexairlines from passengers on our behalf and are later paid to us, depending the airline, with a maximum due date of 60 days following the date of each flight. If any of our key customers were to become insolvent or seek bankruptcy protection, we would be an unsecured creditor with respect to its ownership interestany unpaid passenger charges, and we might not be able to recover the full amount of such charges. For instance, as a result of the Grupo Mexicana insolvency proceeding, we estimate that Ps. 53.0 million in its airlines could also affect the operations and business of Aeroméxico and Aeroméxico Connect and, in turn, have a material adverse effect on our results of operations. Our business and results of operationsaccounts receivable could be adversely affectedat risk of not being recovered (we increased our reserve for doubtful accounts in that amount during 2010), which represented approximately 1.2% of our total revenues (1.4% of the sum of aeronautical and non-aeronautical revenues) and 10.3% of our total accounts receivable as of December 31, 2010, before allowance for doubtful accounts.

In addition, Mexican law prohibits an international airline from transporting passengers from one Mexican location to another, except if the passenger originated travel outside Mexico, thus limiting the number of airlines providing domestic service in Mexico. Accordingly, we do notexpect to continue to generate comparable levelsa significant portion of our revenues from our key customers.domestic travel from a limited number of airlines.

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In 2007, theDuring 2009, we renegotiated our passenger charges collection agreements with all of our airline customers. See “Item 4,Business Overview – Our Sources of Revenues – Aeronautical Services – Passenger Charges.” According to the new agreements that we invoicedtook effect on November 1, 2009, an airline could have a grace period of up to airlines were generally collected,a maximum of 60 days for payment on a weighted averagecase by case basis approximately 78(not all airlines received the same grace period). If an airline wanted a grace period of any amount up to 88the 60-day limit, the airline was required to secure the grace period and the equivalent of 30 additional days followingwith cash, bonds or other collateral equal to the invoice delivery date. The actual termcharges the airline would incur during that period by taking into account the peak operational days for payment generally is dependent upon interest rates on short-term Mexican treasury bills, orCetes, with longer payment periodsthat specific airline during periods of lower interest rates (within a defined range). Our revenues from passenger charges are not secured by a bond or any other collateral.the last 12-month period. Thus, in the event of insolvency or suspension of operations by an airline, we would be able to collect passenger charges invoiced to that airline up to the value of the collateral. Although we would have a 30-day buffer beyond the grace period, our cash flows from operations or our results of operations could be negatively affected if such collateral were not sufficient to cover the outstanding debt. Thus, in the event of any suspension of operations by an airline, such as occurred in 2003 inwas the case of Líneas Aéreas Allegro S.A. de C.V.,with Grupo Mexicana, or insolvency, we would not be assured of collecting any100% of the amounts invoiced to that airline in respect offor passenger charges, whichnor could we be assured that we would recover, in the short term, the traffic they would stop transporting. Both scenarios could negatively affect our cash flows from operations or our results of operations.

Additionally, some of our commercial clients have had difficulty making their payments to our airports. As a result, we have tried to renegotiate terms with many clients to keep them at our airports. Despite our efforts, however, some clients have decided to leave our commercial spaces and cancel their contracts. This could potentially have a negative effect on our revenues.

Our business is dependent on international regulations that affect Mexican airlines.

On July 30, 2010, the United States Federal Aviation Administration (“FAA”) announced that, following an assessment of Mexico’s civil aviation authority, it had determined that Mexico was not in compliance with international safety standards set by the International Civil Aviation Organization (“ICAO”), and, as a result, downgraded Mexico’s aviation safety rating from “Category 1” to “Category 2.”

Under FAA regulations, because of this downgrade, Mexican airlines were not permitted to expand or change their current operations between the United States and Mexico except under certain limited circumstances; code-sharing arrangements between Mexican and U.S. airlines were suspended; and operations by Mexican airlines flying to the United States were subject to greater FAA oversight. These additional regulatory requirements resulted in reduced service between our airports and the United States by Mexican airlines or, in some cases, an increase in that cost of service, which resulted in a decrease in demand for travel between our airports and the United States. Approximately 13.8% of the passengers that traveled through our airports traveled on flights to or from the United States operated by Mexican airlines in 2010.

The FAA restored Mexico’s Category 1 rating on December 1, 2010. The FAA, however, may downgrade Mexico’s air safety rating in the future. We cannot predict what impact such a downgrade would have on our passenger traffic or results of operations, or on the public perception of the safety of Mexican airports.

The principalmain domestic airlines operating at our airports have in the past refused to pay certain increases in our specific prices for aeronautical services and could refuse to pay additional increases in the future.

From 2000 to mid-2003, the principal domestic airlines operating at our 12 airports—Aeroméxico, Mexicana, Aeromar and Aeroméxico Connect—refused to pay certain increases in the specific prices we charge for aeronautical services. On August 31, 2003 (the date on which the balance reached its peak), the amount of invoiced fees subject to dispute was Ps. 47.0 million. As part of this dispute, these airlines brought proceedings challenging the privatization of the Mexican airport sector and the methodology for

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calculating the maximum rate system applicable under the privatization of all of the airport groups in Mexico.

On July 15, 2003, we entered into an agreement with the National Air Transportation Chamber of Commerce ( See “Item 4,Cámara Nacional de AerotransportesBusiness Overview – Principal Customers – Principal Aeronautical Services Customers – Airline Customers”) and the Ministry of Communications and Transportation pursuant to which we resolved existing disputes with our principal airline customers and established specific prices for aeronautical services applicable to those airlines for 2003 and 2004 and a methodology for retroactively applying those prices from 2000, since these airlines had refused to pay certain of our charges since that year. In March 2005, we entered into a renewal agreement with the National Air Transportation Chamber of Commerce for 2005 and 2006. The National Air Transportation Chamber of Commerce agreed to cause our principal airline customers to enter into (a) contracts governing charges for aeronautical services, (b) lease contracts for property used by the airlines and (c) contracts governing collection of passenger charges. As of December 31, 2005, these airlines had entered into agreements with us such that proceedings against us were either resolved or dismissed and no fees remained subject to further dispute. These agreements represented (a) virtually all of the relevant contracts governing the collection of passenger charges, (b) a substantial majority of the agreements for the leasing of space in our terminals and (c) a substantial majority of the contracts governing our aeronautical services, in each case in terms of the total number agreements to be entered into. In December 2006, we entered into a renewal agreement with the National Air Transportation Chamber of Commerce for 2007, 2008 and 2009, covering the same aspects as the prior agreement as well as incorporating an increase in passenger charges. This renewal agreement is more focused on the support and development of, and increased frequencies on, new routes..

BecauseAlthough these prior disputes were resolved by 2006, because only a few airlines contribute a majoritysubstantial portion of our revenues, our results of operations could be adversely impacted if any of these (or any of our other) airlines should the airlines refuse to make payment pursuantpayments in the future. Moreover, because of the current economic downturn, the airlines that generally operate at our airports may be more likely to the agreements described above, or should they refuse to payoppose increases in our charges for aeronautical services in future years, which could adversely impact our results of operations could be adversely impacted.operations.

The airlines at our airports may refuse to continue collecting passenger charges on our behalf or we may decide to collect passenger charges ourselves, which would result in increased costs for us.

We collect a passenger charge for each departing passenger on an aircraft (other than diplomats, infants and transfer and transit passengers). Currently, we have entered into collection agreements with the airlines that operate at our airports to collect those passenger charges on our behalf. As a result, passenger charges are automatically included in the cost of a passenger’s ticket and we issue invoices for those charges to each airline. See “Item 4,Business Overview – Our Sources of Revenues – Aeronautical Services – Passenger Charges.”

We and the airlines with which we have these collection agreements have the right to cancel them with prior notice to the other party. If we or one of our airline customers were to cancel a collection agreement, we would have to implement a collection system of our own to collect passenger charges from passengers directly. The installation and operation of such a collection system would result in additional costs for us, which would negatively impact our results of operations.

The operations of our airports may be disrupted due to the actions of third parties, which are beyond our control.

As is the case with most airports, the operation of our airports is largely dependent on the services of third parties, such as air traffic control authorities, airlines and airlines.ground transportation providers. We are also dependentdepend upon the Mexican government or entities of the government for provision of services, such as electricity, supply of fuel to aircraft, air traffic control and immigration and customs services for our international passengers. Additionally, the disruption or stoppage of taxi or bus services at one or more of our airports could also adversely affect our operations. We are not responsible for and cannot control the

services provided by these parties. Any disruption in, or adverse consequence resulting from, their services, including a work stoppage or other similar event, may have a material adverse effect on the operation of our airports and on our results of operations.

In addition, we are dependent on third-party providers of certain complementary services such as catering and baggage handling. If these service providers were to halt operations at any of our airports, we would be required to seek a new service provider or provide services ourselves, either of which would likely result in increased capital expenditures or costs and have an adverse impact on our cash generation and results of operations.

Actions by the former holders of land comprising Tijuana International Airport may limit our ability to expand the airport and may disrupt its operations.

A portion of the land comprising the Tijuana International Airport was expropriated by the Mexican government in 1970 pursuant to its power of eminent domain. Prior to its expropriation, the land had been held by a group of individuals through a system of communal ownership of rural land known as

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anejido. The formerejido participants have asserted indemnity claims against the Mexican government challenging the 1970 expropriation decree. Our Tijuana airport subsidiary is a party tohas been joined in the proceedings, but only as an interested third party. ADuring 2008, theejido received an unfavorable ruling, which it appealed, and subsequently, received a judgment in favorits favor. The current judgment calls for the restitution of 320 hectares of land, although the formerejido participantsprecise area affected has yet to be assessed. Depending on which particular area is to be restituted, this could affect the airport’s perimeter and could materially disrupt the airport’s current operations. The terms of our concession requireWe have contested this latest ruling in a second appeal and are awaiting the Mexican government to provide restitution to us for any loss of our usedecision of the land subject to our concessions.court. See “Item 8,Legal Proceedings – Ejido Participants at Tijuana Airport.”

Certain of the formerejido participants are currently occupying portions of the real property on which we operate Tijuana International Airport that are not currentlyat present essential to the airport’s operations. Although these persons are not currently interfering with the airport’s operations, their presence could limit our ability to expand the airport into the areas they currently occupy. In addition, there can be no assurance that the formerejido participants will not seek to disrupt the airport’s operations if their legal claims against the Mexican government are not resolved to their satisfaction.satisfaction, which may negatively impact our results of operations.

We may be liable for property tax claims asserted against us by certain municipalities.

We remain subject to ongoing real estate tax claims that have been asserted against us by the municipal authorities of Mexicali, Tijuana, Puerto Vallarta, Guadalajara, La Paz and Hermosillo for the payment of property taxes with respect to the property on which we operate our airports in those cities, and similar claims have been and may be asserted by other municipal authorities where we operate our airports. We believe that under the law, the Mexican government, as the owner of the property upon which we operate our airports, would currently be responsible for paying these taxes directly if a court were to determine that these taxes must be paid in response to any future proceedings. See “Item 8,Financial Information – Legal Proceedings – Property tax claims by certain municipalities” for a full discussion of these property tax proceedings.

In addition, on May 28, 2010, the State Legislature of Jalisco sent to the Mexican Congress a legislative initiative in which they requested that Congress consider changing the current Mexican Airport Law so that privately held airports operating on federal land would be subject to municipal taxes.

If the Mexican government changes the current laws or if we do not prevail in the aforementioned proceedings, these tax liabilities could have a material adverse effect on our financial condition and results of operations.

The actions of squatters on certain portions of the land on which our Guadalajara International Airport operates could disrupt operations and security at that airport.

The Mexican government owns the land on which the Guadalajara International Airport operates and has granted us the right to use that land for the purpose of operating the airport pursuant to our concession. Currently, there are squatters residing on or claiming rights to a portion of the property, at least one of whom has attempted to subdivide and sell off certain portions of the property. As owner of the property, the Mexican government must initiate any actions directed at removing these persons from the property. We are reviewing the actions these persons have taken and are cooperating with the Mexican government to ensure that the actions of these squatters do not adversely affect the operations of the Guadalajara International Airport. However, if the Mexican government or we are unable to successfully remove these persons from the property, their presence could have an adverse impact on our operations and security at the airport and could restrict our ability to expand our operations at the airport.

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High incidencesOur business could be adversely affected by the penalty imposed by the Mexican tax authority on some of crime in Mexico, and drug trafficking in particular, could adversely affect our business.airports.

A recent Travel Alert issued by the U.S. Department of State (Bureau of Consular Affairs) on April 14, 2008 provides information for U.S. citizens on security issuesThe Mexican tax authority (Servicio de Administración Tributaria, or “SAT”), in Mexico. According to such report, violent criminal activity fueled by a war between criminal organizations struggling for controlconnection with its review of the lucrative narcotics trade continues alongyear 2005, sent us official notices in 2008 and 2009 stating that, under its criteria, the U.S.-Mexico border. Although attacks are aimed primarily at members of drug trafficking organizations and Mexican police forces, foreign visitors and residents, including U.S. citizens, have been among the victims of homicides and kidnappings in the border region. Violence by criminal elements affects many partsfiscal amortization rate used for each of the country, both urbanAguascalientes, La Paz, Los Mochis, Morelia and rural, including border areas. Though there is no evidence that U.S. citizens are specifically targeted, Mexican and foreign bystanders have been injured or killedMexicali airports’ concession values was incorrect. We initiated legal proceedings in some violent attacks, demonstrating the heightened risk in public places. Higher incidences of crime throughout Mexico, and drug trafficking in particular, could have an adverse affectfederal tax court to challenge SAT’s findings, based on our business as it may decreasecontention that SAT did not take into consideration all the passenger traffic directedrelevant legal matters concerning the Company’s position on amortization. If the tax court determines that the airports are in violation, those airports would be required to Mexico from abroad. In addition, our operationsmodify their tax calculations since 2005, which could be affected to the extent that it is necessary for us to increase security surveillance and other measures in our airports to combat crime, including drug trafficking.

Natural disasters could adverselynegatively affect our business.net income.

From time to time, the Pacific and central regions of Mexico experience torrential rains and hurricanes (particularly during the months of July through September), as well as earthquakes. The most recent natural events that affected our airports were two hurricanes in August and September of 2003 that resulted in temporary closures and property damages at our Los Cabos International Airport and our La Paz International Airport. In addition, the Manzanillo International Airport experienced an earthquake in 2003, which caused significant damage to the airport and required the airport to be closed for several hours. Natural disasters may impede operations, damage infrastructure necessary to our operations or adversely affect the destinations served by our airports. In 2006 and 2007, Los Cabos International Airport and La Paz International Airport were closed for several hours as a result of Hurricanes John, Lane and Henriette but experienced no significant damages. Any of these events could reduce our passenger traffic volume. The occurrence of natural disasters in the destinations we serve could adversely affect our business, results of operations, prospects and financial condition. We have insured the physical facilities at our airports against damage caused by natural disasters, accidents or other similar events, but do not have insurance covering losses due to resulting business interruption. Moreover, should losses occur, there can be no assurance that losses caused by damages to the physical facilities would not exceed the pre-established limits on any of our insurance policies.

Risks Related to the Regulation of Our Business

We cannot predict how the regulations governing our business will be applied.

Many of the laws, regulations and instruments that regulate our business were adopted or became effective in 1999, and there is only a limited history that would allow us to predict the impact of these legal requirements on our future operations. In addition, although Mexican law establishes ranges of sanctions that might be imposed should we fail to comply with the terms of one of our concessions, the Mexican Airport Law (Ley de Aeropuertos) and its regulations or other applicable law, we cannot predict the sanctions that are likely to be assessed for a given violation within these ranges. We cannot assure you that we will not encounter difficulties in complying with these laws, regulations and instruments.

Moreover, when determining our maximum rates for the next five-year period (from 2010 to 2014), the Ministry of Communications and Transportations may be pressured significantly by different entities (such as, for example, the Mexican Competition Commission and the carriers operating at our airports) to try to impose rates that reduce our profitability. Therefore, there can be no assurance that the laws and regulations governing our business, including the rate-setting process and the Mexican Airport Law, will not change in the future or be applied or interpreted in a way that could have a material adverse effect on our results of operations.

We provide a public service regulated by the Mexican government and our flexibility in managing our aeronautical activities is limited by the regulatory environment in which we operate.

Our aeronautical fees charged to airlines and passengers are regulated, like those of most airports in other countries. In 2005, 20062008, 2009 and 2007,2010, approximately 81.5%79.1%, 81.4%77.7% and 80.9%,67.6% respectively, of our total revenues were earned from aeronautical services, which are subject to price regulation under our maximum rates.rates (in 2010, 79.6% of the sum of aeronautical and non-aeronautical revenues were earned from aeronautical services). These regulations may limit our flexibility in operating our aeronautical activities, which could have a material adverse effect on our business, results of operations, prospects and financial condition. In addition, several of the regulations applicable to our operations that affect our profitability are authorized (as in the case of our master development programs) or established (as in the case of our maximum rates) by the Ministry of Communications and Transportation for five-year terms. Except under limited circumstances, we generally do not have the unilateral ability to unilaterally change our obligations (such as the investment obligations under our master development programs or the obligation under our concessions to provide a public service) or increase our maximum rates applicable under those regulations should ourthe passenger traffic or other assumptions on which the regulations were based change during the applicable term. In addition, there can be no assurance that this price regulation system will not be amended in a manner that would cause additional sources of our revenues to be regulated.

We cannot predict how the regulations governing our business will be applied.

Many of the laws, regulations and instruments that regulate our business were adopted or became effective in 1999, and there is only a limited history that would allow us to predict the impact of these legal requirements on our future operations. In addition, although Mexican law establishes ranges of sanctions that might be imposed should we fail to comply with the terms of one of our concessions, the Mexican Airport Law and its regulations or other applicable laws, we cannot predict the sanctions that are likely to be assessed for a given violation within these ranges. We cannot provide assurance that we will not encounter difficulties in complying with these laws, regulations and instruments. Although our maximum rates through 2014 have been set, we cannot predict how our master development programs for the next five-year period from 2015 to 2019 will be determined. We also cannot provide assurance that other regulatory agencies or the Mexican legislature will not impose regulations adverse to our operations in the future or that the laws and regulations governing our business, including the master development programs and the maximum rate-setting process and the Mexican Airport Law, will not change in the future or be applied or interpreted in a way that could have a material adverse effect on our results of operations.

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The price regulatory systemregulations pursuant to which the maximum rates applicable to our airports imposes maximum rates for each airport.

The price regulatory system doesaeronautical revenues are established do not guarantee that we or any of our consolidated results of operations, or that the results of operations of any airport,airports will be profitable.

The system of price regulationregulations applicable to our airports establishesaeronautical activities establish an annual maximum rate for each airport, which is the maximum annual amount of revenues per work loadworkload unit (which is equal to one passenger or 100 kilograms (220 pounds) of cargo) that we may earn at that airport from services subject to price regulation. The maximum rates for our airports have been determined for each year through December 31, 2009.2014. For a discussion of the framework for establishing our maximum rates and the application of these rates, see “Item 4,Information on the Company—Company – Regulatory Framework—Framework – Aeronautical Services Regulation.Regulation.” Under the terms of our concessions, there is no guarantee that our consolidated results of operations or the results of operations of any airport will be profitable.

Our concessions provide that an airport’s maximum rates will be adjusted periodically for inflation.inflation (determined by reference to the Mexican Producer Price Index (Índice Nacional de Precios al Productor), excluding petroleum). Although we are entitled to request additional adjustments to an airport’s maximum rates under certain circumstances, including the amendment of certain provisions of the Mexican Airport Law,laws and regulations that structure and influence our business, our concessions provide that such a request will be approved only if the Ministry of Communications and Transportation determines that certain events specified in our concessions have occurred. The circumstances under which we are entitled to an adjustment are described under “Item 4,Information on the Company—Company – Regulatory Framework—Framework – Aeronautical Services Regulation—Regulation – Special Adjustments to Maximum Rates.Rates.” ThereTherefore, there can be no assurance that any such request would be made or granted.

Our results of operations may be adversely affected by required efficiency adjustments to our maximum rates.

In addition, our maximum rates are subject to annual efficiency adjustments, which have the effect of reducing the maximum rates for each year to reflect projected efficiency improvements. For the five-year term ending December 31, 2009,2014, an annual efficiency adjustment factor of 0.75%70 basis points was established by the Ministry of Communications and Transportation. Future annual efficiency adjustments will be determined by the Ministry of Communications and Transportation in connection with the setting of each airport’s maximum rates every five years. For a description of these efficiency adjustments, see “Item 4,Information on the Company—Company – Regulatory Framework—Framework – Aeronautical Services Regulation—Regulation – Methodology for Determining Future Maximum Rates.Rates.” We cannot assure youprovide assurance that we will achieve efficiency improvements sufficient to allow us to maintain or increase our operating income as a result of the progressive decrease in each airport’s maximum rate.