Mexico - January 2026

Mexico’s newly formed antitrust and competition watchdog Comisión Nacional Antimonopolio (CNA) is facing its first major test ahead of the planned mega-merger between the two leading local budget airlines, Volaris and Viva Aerobus. If it goes ahead, it would create Mexico’s largest domestic carrier by far, fundamentally changing the North American aviation landscape, potentially reshaping north-south connectivity and competition across the region. 

The question that the CNA must now ponder is whether the consolidation will simply create a major strategic asset for Mexico that would be more resilient in the face of global aviation volatility, or whether the duopoly (alongside flag carrier Aeroméxico) that it risks creating represents a significant threat to consumers by stifling the low-cost revolution that both airlines helped to start. In other words, do scale and efficiency outweigh the risks of reduced competition?

In theory, the merger between the two ultra-low-cost carriers, which was announced on 18 December, seeks to offer more flights at lower prices for passengers. Billed as a “merger of equals”, it would give each airline a 50% stake in the new company, which is to be known as ‘Grupo Más Vuelos’ (More Flights Group), while the two airlines would maintain their separate identities, brands, and operations. Pending regulatory approval, the transaction is expected to close in 2026, with the shares of the holding company remaining listed on the Mexican and New York stock exchanges. 

The main motivation for the transaction is the creation of a massive, low-cost powerhouse that is financially stronger and operationally leaner, capable of competing not just within Mexico, but across the continent. Combining fleets would create one of the largest Airbus operators in the world, and reduce aircraft ownership costs, making maintenance, procurement, and pilot training more efficient. There are also important network synergies between the airlines: while Volaris has a stronger presence in the US-Mexico transborder market, Viva has strong links to bus transport through its parent company Grupo IAMSA.

Given that the carriers have a combined market share of around 70% or more of domestic air traffic, the merger is likely to be strongly opposed by Aeroméxico, the largest Mexican carrier for international travel, with its domestic strength concentrated in Mexico City. At present, the domestic market is split roughly equally between Volaris, Viva, and Aeroméxico, each with about a third of traffic. A Viva-Volaris combination would leave Aeroméxico as the only other nationwide competitor, effectively reducing the major players in Mexico’s local aviation market from three to just two. Critics argue that the lack of a third major low-cost player would lead to higher fares and reduced quality for travellers.

Nevertheless, President Claudia Sheinbaum welcomed the “special alliance” between the two companies, denying that it was in fact a merger. Certainly, the strategic value of the deal cannot be ignored, especially at a time when Mexico’s aviation sector has suffered a number of recent setbacks, after the US rejected 13 flight routes by Mexican airlines into the US, while in September it revoked antitrust immunity for an agreement between Aeroméxico and Delta Air Lines. In addition, some analysts suggest the government might support the merger if it provides an opportunity for the state-run airline, Mexicana de Aviación, to grow its currently negligible market share. That has led to speculation that regulators could face political pressure to approve the deal.