Mexico is expected to approve the proposed combination of budget airlines Volaris and Viva Aerobus by the end of 2026, potentially creating a dominant force in the country’s aviation industry despite concerns over reduced competition.
The country’s antitrust regulator is moving toward authorizing the transaction with relatively limited operational restrictions, Reuters reported Tuesday, citing six people familiar with the discussions. The merger would establish Grupo Más Vuelos, a holding company overseeing two airlines that together account for approximately 75% of Mexico’s domestic flights.
The anticipated approval would represent a significant shift in Mexico’s airline market, concentrating much of the country’s domestic air travel under one corporate group while testing regulators’ ability to safeguard competition and affordable fares.
According to Reuters, the Comisión Nacional Antimonopolio, or CNA, is expected to impose conditions requiring the combined company to preserve most existing routes, maintain competitive ticket prices and avoid large-scale workforce reductions.
Three people familiar with the regulatory discussions told Reuters that the airline group would also be required to continue operating under a low-cost business model.
The agreement has not received final approval, and regulators are still determining how some of the proposed conditions would be implemented and monitored.
Market Concentration Raises Competition Concerns
The proposed merger would bring together Mexico’s two leading low-cost carriers, which have steadily expanded their domestic presence and overtaken traditional rival Aeromexico in market share.
The competitive implications are particularly significant on routes where passengers already have limited alternatives.
An analysis conducted by Reuters found that Volaris and Viva Aerobus currently compete on 85 routes. Following the transaction, the combined group would become the only operator on 55 of those routes, creating substantial concentration in markets including Guadalajara and Monterrey.
Despite those concerns, regulators are not expected to impose major restrictions on the number of flights the companies can operate at Mexico’s busiest airports, according to people cited by Reuters.
Instead, authorities are considering measures intended to keep fares competitive and preserve air service on routes that could otherwise lose connections.
One person familiar with the discussions told Reuters that some ticket prices may need to remain comparable to those charged by similar airlines elsewhere in the region.
Javier Núñez, a former Mexican antitrust commissioner and competition specialist, told Reuters that allowing additional competitors access to heavily concentrated routes could be among the most practical regulatory remedies.
Aeromexico, meanwhile, has opposed the transaction, according to a person familiar with the company’s position who spoke to Reuters. The airline is concerned that regulatory conditions may prove insufficient to constrain the combined group’s market power.
Financial Pressures Drive Consolidation
The transaction, announced in December 2025, follows several difficult years for Mexico’s aviation industry.
Both Volaris and Viva Aerobus have faced financial pressure from elevated fuel expenses and aircraft groundings associated with mandatory engine inspections, Reuters reported.
Unlike Aeromexico, which underwent restructuring, neither low-cost airline pursued a comparable process during the pandemic recovery.
The merger is structured as a combination of equals, with both carriers expected to retain their separate brands and operating identities.
Grupo Más Vuelos would be led by executives from both businesses, with Viva Chairman Roberto Alcántara heading the new parent company.
Volaris Chief Executive Officer Enrique Beltranena played an important role in advancing the agreement, Reuters reported, citing a person familiar with the airline’s operations.
The combination could provide the carriers with greater financial flexibility and opportunities for operational coordination, although the extent of those benefits will depend on the final regulatory requirements.
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Government Airport Strategy Adds Political Dimension
The proposed merger also carries implications for Mexico’s efforts to increase traffic at government-operated airports.
According to Reuters, two people familiar with the matter described government pressure to advance the transaction, partly because Volaris and Viva Aerobus are leading operators at Felipe Ángeles International Airport, outside Mexico City.
Related: US Clears Volaris-Viva Aerobus Combination as Mexico Review Looms
The airport has struggled to attract traffic comparable to the capital’s established aviation hub.
One person told Reuters that the airlines had committed to increasing services at Felipe Ángeles and the government-operated airport in Tulum, despite relatively weak passenger demand.
Those commitments could support Mexico’s broader airport development strategy while adding another dimension to the regulatory review.
The CNA also examined potential restrictions involving IAMSA, the transportation group associated with Alcántara and a major shareholder in Viva. The group operates bus services and ground transportation connections.
However, the transaction is expected to proceed without substantial concessions from IAMSA, according to one person cited by the news agency.
Approval Would Test Mexico’s New Antitrust Regulator
The merger represents an early high-profile challenge for the CNA, which replaced Mexico’s previous competition authority in 2025.
The regulator must weigh the financial and operational arguments supporting consolidation against the possibility that fewer competitors could weaken pricing discipline and reduce consumer choice.
Mexico has previously blocked major airline consolidation on competition grounds. In 2007, authorities prevented Mexicana from acquiring Aeromexico, Reuters noted.
The latest transaction has already received antitrust clearance in the United States and Colombia, leaving Mexico’s review as a critical remaining hurdle.
Source: Reuters
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