Volaris and Viva Aerobus have agreed to merge their holding companies in a 50/50 transaction that will create a new Mexican airline group while allowing each brand to continue operating under its existing certificates and identity. The new entity will be listed on both the Bolsa Mexicana de Valores and the New York Stock Exchange, with the merger expected to close in 2026 after regulatory approvals.
The merger is designed to deliver significant cost synergies, lower fleet‑ownership costs, and expand market reach across Mexico, the United States, Central and South America. By combining their route networks and purchasing power, the group will be able to negotiate better terms with suppliers, reduce per‑seat operating costs, and offer a broader array of destinations, positioning the combined carrier as a dominant low‑fare provider that can compete more aggressively with Aeroméxico and other regional players.
Financially, the deal is driven by recent performance trends. Volaris reported a $63 million net loss in Q2 2025, a sharp decline from a $10 million net income in the same period a year earlier, driven by a 5 % drop in operating revenue and a compression of the EBITDAR margin from 35.9 % to 27.9 %. Viva Aerobus posted a $56 million net income in Q3 2023, while Volaris recorded a $39 million loss in the same quarter, reflecting the volatility in the low‑cost segment. The merger is therefore a strategic response to stabilize earnings, leverage scale, and mitigate the impact of external headwinds such as engine inspection disruptions and currency fluctuations.
Both CEOs highlighted the strategic benefits. Enrique Beltranena, Volaris president and CEO, said the new group will “realize significant growth opportunities for air travel in Mexico, in line with the low‑fare, point‑to‑point approach that has revolutionized the industry.” Juan Carlos Zuazua, Viva Aerobus CEO, added that the transaction will “enable ultra‑low‑cost fares and more point‑to‑point travel to even more cities across Mexico and internationally,” underscoring the focus on expanding connectivity while maintaining cost discipline.
Investors have responded positively, reflecting confidence in the merger’s potential to create a more resilient, cost‑efficient, and market‑leading entity. The deal is expected to unlock value through economies of scale, improved capital access, and a stronger competitive position against larger incumbents.
Regulatory approval remains pending, with scrutiny expected from Mexican authorities and potential opposition from Aeroméxico on anti‑competition grounds. The airlines will also need to navigate ongoing Pratt & Whitney engine inspection challenges, but the combined purchasing power should help mitigate operational disruptions and reduce fleet‑utilization costs. The merger is projected to close in 2026, after which the new holding company will begin integrating operations and pursuing growth initiatives across the region.
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