Mexico’s antitrust commission (COFECE) announced that it will revise the planned 50/50 merger between low‑cost carriers Volaris and Viva Aerobus, a deal that would create Mexico’s largest low‑cost airline group. The revision requires the airlines to modify the transaction terms before the merger can receive regulatory approval, signaling heightened scrutiny and the possibility of a delay to the originally targeted 2026 closing date.
The merger is structured as a holding‑company consolidation that preserves both brands, operating certificates, and management teams. Combined, Volaris and Viva Aerobus command roughly 71% of Mexico’s domestic air‑travel market, with Volaris holding 33% and Viva 38% as of 2024. The deal is intended to expand low‑fare travel, enhance connectivity, and achieve economies of scale, while maintaining passenger choice through separate brand identities.
Financially, Volaris reported a net loss of $63 million in the second quarter of 2025, with operating revenues of $693 million—a 5% decline year‑over‑year. Viva Aerobus posted a net loss margin of 8.5% in the first quarter of 2025, with revenues of $491 million, down 20.7% YoY; its second‑quarter revenue was $549 million, a 10.3% decline. Both airlines face headwinds from a depreciating Mexican peso, softer macroeconomic conditions, and operational challenges related to Pratt & Whitney engine recalls.
Management emphasized the strategic benefits of the merger. Volaris President and CEO Enrique Beltranena said the new airline group would “realize significant growth opportunities for air travel in Mexico, in line with the low‑fare and point‑to‑point approach that revolutionized the industry over the last two decades.” He added that economies of scale and expanded distribution capacity would lower fleet ownership costs and strengthen competitiveness. Viva CEO Juan Carlos Zuazua highlighted the shared low‑cost DNA, stating that “our passengers choose us for our point‑to‑point networks, seamless customer service, and low fares, so maintaining our ultra‑low‑cost strategy is essential for sustaining growth.”
COFECE’s review process typically spans 60 business days, extendable in complex cases, and may be influenced by the impending establishment of a new National Antimonopoly Commission (NAC) later in 2025. The commission’s revision could trigger remedies such as divestitures at congested airports to address antitrust concerns. Both airlines operate exclusively Airbus A320 family aircraft, facilitating operational synergies and cost efficiencies that the commission will scrutinize in its assessment of market concentration and potential competitive effects.
Investors have responded positively to the announcement, citing the merger’s potential to deliver cost synergies, broaden market reach, and strengthen the combined entity’s competitive position against Aeromexico. The regulatory revision underscores the importance of compliance and the need for the airlines to demonstrate that the merger will not substantially lessen competition in Mexico’s domestic market. The outcome of COFECE’s review will be closely watched, as it will shape the timeline and terms of the deal and influence the airlines’ strategic trajectory moving forward.
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