Viva and Volaris merger to consolidate Mexico’s LCC market

Grupo Viva and Volaris have formalized a strategic agreement to merge their holding companies, giving rise to the new Mexican Airline Group. This transaction, designed as a merger of equals, will grant shareholders of both companies a 50% stake in the resulting entity. Viva shareholders will receive newly issued shares of the Volaris holding company, which will maintain its public listing on the Mexican Stock Exchange (BMV) and the New York Stock Exchange (NYSE).

The definitive execution of the operation is projected for 2026, subject to obtaining government and regulatory approvals in Mexico and other jurisdictions. A critical aspect of the agreement is that, despite the integration at the holding level, both airlines will preserve their brands, commercial identities, operating structures, and, crucially, their independent air operator certificates. The group's governance will be led by Roberto Alcántara Rojas, current Chairman of the Board of Viva, who will assume the chairmanship of the new holding company, while the executive leadership of each airline will remain unchanged.

The technical justification for the merger lies in generating economies of scale to mitigate fleet ownership costs and optimize access to capital markets. By sharing technological infrastructure and reservation systems, the companies aim to capture substantial operational synergies. Regarding route networks, the group plans an aggressive expansion in point-to-point connectivity, prioritizing markets in the United States, Central America, South America, and the Caribbean, in addition to consolidating its domestic presence.

"We estimate that the formation of the new airline group will allow us to drive the growth of aviation in Mexico, in line with the low-cost and point-to-point flight model that has revolutionized our industry over the last two decades," explained Enrique Beltranena, President and CEO of Volaris. The executive added that improving distribution capacity will be key to "competing even more effectively in national and international markets by reducing fleet ownership costs."

For his part, Juan Carlos Zuazua, CEO of Viva, noted that the goal is to "offer low fares and more point-to-point flights to even more cities throughout Mexico and abroad, benefiting not only passengers but also local economies and communities." Zuazua emphasized that the ultra-low-cost carrier (ULCC) strategy is non-negotiable to maintain passenger loyalty and "continue offering more low-cost flights."

The Mexican Airline Group roadmap places a special focus on the Mexico City metropolitan area. A significant increase in operations at Felipe Ángeles International Airport (AIFA) is contemplated, along with the opening of new operating bases in strategic points across the country. In the commercial sphere, the interoperability of the Doters and Altitude loyalty programs will be evaluated, together with the implementation of codeshare agreements to maximize load factors on international routes.

Finally, the agreement establishes a transition period where Airbus aircraft maintenance and procurement processes will be aligned, seeking to optimize the shared supply chain. The combined financial strength will allow the group to face fuel price fluctuations and regional regulatory challenges with greater resilience.

The Numbers Behind Each Low-Cost Carrier

Volaris has a fleet consisting of 111 A320 family aircraft (81 A320s and 30 A321s) with an average age of 8.7 years. Additionally, it has 118 aircraft on order.

Viva, for its part, has 97 aircraft (62 A320s and 35 A321s) with an average age of 9.1 years, and 13 pending delivery.

• Financials (2024):Volaris: Reported revenues of USD 3.34 billion, with a net profit of USD 126 million.Viva: Reported revenues of USD 2.702 billion, with a net profit of USD 235 million.
• Operational Performance (2024):Volaris transported 29 million passengers with an average load factor of 87%.Viva transported 27.6 million passengers with a load factor of 87.3%.
• Workforce: At the close of the 2024 fiscal year, Viva reported 5,165 employees, while Volaris reported 6,901 employees.

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