Mexico’s two major low-cost carriers, Viva Aerobus and Volaris, have decided to enter an equal merger partnership wherein the two carriers will maintain their individual brands and the two airlines will have a 50% stake each in the newly proposed merged organization.
This merger is aimed to be executed in 2026, assuming it receives approval from the Mexican regulatory authority and gets the green light from relevant antitrust regulators. However, it can be expected that the competitor of both these carriers, Mexico’s Aeromexico, will have some opposition to this planned merger.
Viva Aerobus And Volaris To Merge?
Two of the largest low-cost airlines in Mexico, Volaris and Viva Aerobus, have planned a merger in 2026, which will see both airlines still maintain their individual brands. According to Reuters, this proposed merger will be at the holding level, wherein both carriers will have an equal, 50% ownership of the newly formed organization.
While the two carriers will maintain their brands and even independent operations, because of the similarities in the fleet utilized by the airlines, along with a similar network structure, the two carriers, by collaborating with each other, have much to gain in terms of economies of scale and resource sharing. 2024 market data published by Aviacionline shows that Volaris and Viva accounted for 33% and 38% of the country’s domestic market, which sums up to 71%, with the remaining market share mostly held by 
Aeromexico.
Statements from the airlines that this merger will boost the networks of both carriers, thereby enhancing low-cost air travel within the country, and contribute to Mexico’s economic growth. Reuters reported the following comment from Volaris’ CEO, Enrique Beltranena,
“We expect the formation of the new airline group will allow us to realize significant growth opportunities for air travel in Mexico.”
Benefits Of The Planned Merger
So what exactly are the aforementioned benefits of this merger? Well, to understand that, it is first worth noting that the two airlines exclusively operate the Airbus A320 family aircraft, with both airlines operating the Airbus A320 and Airbus A321 variants. This, paired with the fact that the two carriers have similar networks, including the same bases, means it is easy for the two carriers to pool resources at various operational levels.
Previously, when the two airlines were competitors, both carriers would have needed resources such as staff and systems at these airports, but once merged, the ground operations of both airlines could be handled by a single group of staff. Similar advantages can be seen within the engineering side, as both airlines operate the same aircraft types, the maintenance team and facility of one airline can handle the aircraft of the other.
Furthermore, with the two carriers cooperating, passengers will have more options and itineraries available across the networks of the two airlines, enhancing connectivity for customers. All these factors will reduce the operational costs for the airline, which in turn will allow the airline to reduce the ticket fares, thereby enabling more passengers to fly, subsequently boosting connectivity, tourism, and the economy.
Viva’s 5 Busiest Routes From Mexico City This Month
The low-cost carrier has a considerable presence in the Mexican capital.
Potential Obstacles That Could Be Faced
While there are a lot of advantages to be had from airlines merging, if it is not done right, it can also negatively impact the entire market. This is why, quite often, airline mergers are met with opposition from regulators, antitrust or consumer protection organizations, and even the competition. In this case, a key factor is that the two airlines individually account for over 30% of the domestic market share, which is fine at the moment, but upon merging, the combined entity would solely account for 71% of the Mexican domestic market.
This can be a cause for concern, as this would mean the market suddenly becomes monopolistic in nature and competition reduces. While this would reduce costs for the airline, enabling them to reduce fares for passengers, it could also potentially allow the two airlines to collude and manipulate the market prices, possibly raising ticket fares. If this were to happen, the public would be left with increased prices and reduced competition, which can have negative impacts.
As such, it is a very real possibility that this merger will face hurdles from the Mexican Regulators (and other relevant regulators), along with antitrust organizations, and above all, their largest competition, Aeromexico, which will experience a considerable impact across its domestic network and its competitive abilities.
