Volaris and Viva Aerobus Form Strategic Alliance to Dominate Mexican Low-Cost Market

2025-12-19 companies

Mexico City, Friday, 19 December 2025.
In a decisive move to reclaim market share from U.S. competitors, Volaris and Viva Aerobus have agreed to a 50-50 merger of equals under a new holding group. While retaining separate brand identities, this consolidation aims to leverage economies of scale and stabilize operations following recent widespread flight disruptions across Mexico.

Structuring a Merger of Equals

Under the terms of the agreement announced on December 18, 2025, Volaris and Viva Aerobus will operate under a new holding company structure in a transaction described as a merger of equals [1][4]. Each shareholder group is set to own exactly 50% of the newly formed entity, ensuring a balanced distribution of control [1][4]. While the airlines will preserve their distinct operating certificates, brands, and cultures, the overarching group will be chaired by Roberto Alcántara Rojas, the current chairman of Viva’s board [1]. This corporate reconfiguration is designed to bolster the financial profile of both entities through economies of scale, a critical necessity as they navigate a highly competitive North American airspace [1].

Combating International Dominance

The strategic impetus behind this alliance appears to be a direct response to the encroaching dominance of U.S. carriers in the region. Data indicates that United States airlines currently hold more than half of the international market share for passengers transported to and from Mexico, whereas Mexican airlines account for just under 30% [4]. By joining forces, Volaris and Viva aim to create a “champion of low cost” capable of reclaiming this market share [4]. Enrique Beltranena, President and CEO of Volaris, emphasized that the group intends to capitalize on the “low fare and point-to-point approach that revolutionized the industry over the last two decades” to realize these growth opportunities [1].

Operational Turbulence and Infrastructure Challenges

The consolidation comes at a moment of significant operational stress for the Mexican aviation sector. Just days prior to the announcement, on December 16, 2025, a wave of flight cancellations grounded over 65 flights across the country, impacting major hubs including Tijuana, Los Cabos, and Mexico City [2]. These disruptions affected multiple carriers, including Volaris and Viva, as well as international partners like Alaska Airlines and LATAM [2]. The operational strain was further highlighted on December 14, when more than 500 passengers faced delays of up to 10 hours at the Hermanos Serdán International Airport in Puebla [5]. Such incidents underscore the urgent need for the operational resilience the new group hopes to achieve.

Financial Outlook and Future Integration

From a financial perspective, the merger brings together substantial assets and a history of aggressive expansion. Volaris (NYSE: VLRS), which has seen its fleet expand by 3775% since commencing operations in 2006, closed trading on Thursday with a market capitalization of approximately 17.4 billion pesos (967.134 million USD) [1][4]. The companies project that the alliance will not only stabilize their balance sheets but also serve as an economic engine, expecting to generate between 55 and 60 direct jobs for every new aircraft added to their combined fleet [1].

Sources

Aviation Mexico