AIRLINES & ALLIANCES

GLO Analysis: Volaris & Viva Merger – Potential Loyalty Scenarios. Expect Evolution, Not Disruption

Volaris

20 December 2025

When Volaris and Viva briefed investors on December 19, 2025, the headline was clear: two iconic ultra-low-cost carriers, one airline group—but no rush to integration. Nowhere was that message more deliberate than in loyalty.

Despite speculation that scale would immediately trigger a merged frequent-flyer scheme, management struck a different tone. Loyalty, they suggested, will be strengthened over time, not reinvented overnight. For investors, that distinction matters.

What Was Actually Announced

First, the guardrails. Volaris and Viva will retain their independent brands. As a result, their existing loyalty programs remain separate at the airline level, with no immediate consolidation or reciprocal earning announced. The new group structure allows coordination at a holding-company level without operational merger—preserving each carrier’s customer proposition and ultra-low-cost discipline.

What management did emphasize was direction rather than detail: “enhanced loyalty programs,” broader commercial and global partnerships, and the ability to leverage scale to improve customer experience. Loyalty was explicitly linked to improving Net Promoter Scores, a metric both airlines have historically highlighted as demand-supportive rather than cost-heavy.

What investors did not hear is just as important. There was no mention of a unified loyalty currency, no changes to points economics, no disclosure of financial contribution, and no timeline. The strategy is evolutionary, not disruptive.

Why Loyalty Still Matters In A ULCC World

At first glance, loyalty and ultra-low-cost carriers can seem at odds. Volaris and Viva serve fare-sensitive customers—many traveling for leisure or visiting friends and relatives (VFR)—who prioritize price over perks.

But scale changes the equation. The combined group now spans more than 320 routes and 85 destinations, creating materially more earn-and-burn opportunities. That breadth increases the relevance of loyalty even for price-driven travelers, particularly in U.S.–Mexico cross-border markets that account for roughly 40 million passengers annually.

Crucially, management framed loyalty as a demand and retention tool, not a giveaway. The goal is to reinforce repeat behavior, improve ancillary attachment, and stimulate demand—while keeping headline fares low.

Three Plausible Loyalty Paths

From an investor lens, the group’s loyalty roadmap can be viewed through three scenarios, each with distinct risk-reward tradeoffs.

1. Conservative: Separate Programs, Light Enhancements

The most cautious path keeps Volaris and Viva’s programs fully independent. Enhancements focus on digital experience, clearer earn-and-burn mechanics, targeted promotions, and member-only pricing. Scale shows up primarily in partner negotiations with banks, retailers, and telcos.

This approach carries minimal execution risk and fits management’s emphasis on simplicity and stability. Early signals would be partner-driven announcements rather than program overhauls—much like IAG’s early years before Avios consolidation, or Ryanair’s CRM-heavy “light loyalty” model.

2. Base Case: A Reciprocity Layer (Most Likely)

The most compelling middle ground introduces reciprocity without brand dilution. Customers could earn and redeem across both airlines, potentially with limited elite recognition, while maintaining distinct brand identities. Behind the scenes, this would require unified customer IDs and settlement rules—but not an operational merger.

This model unlocks network effects quickly: higher retention, more cross-brand bookings, and stronger ancillary spend. It mirrors proven structures at Air France–KLM (Flying Blue), Qantas Group (Qantas and Jetstar), and Accor’s multi-brand hotel ecosystem. Importantly, it aligns closely with management’s language: two brands, enhanced loyalty, expanded connectivity.

3. Aggressive: A Group-Level Loyalty Platform

The highest-upside—but highest-risk—scenario would see the launch of a new group loyalty platform or currency sitting above both airlines. This opens the door to significant monetization via co-brand credit cards and everyday earn partnerships, particularly appealing for binational travelers.

History shows the upside is real—Avios, Aeroplan, and LATAM Pass all evolved into meaningful profit engines—but so is the complexity. IT investment, customer confusion, and the risk of benefit creep run counter to the ULCC ethos. This is a long-term option, not a near-term signal.

Competitive Context In Latin America

Compared with peers, Grupo Más Vuelos occupies a distinct loyalty position. LATAM uses loyalty as a yield and premium-cabin lever; Azul has leaned heavily into bank and issuer economics; Copa’s ConnectMiles is built around hub-driven frequency and elite benefits.

Volaris and Viva are different. Their customers are explicitly demand-stimulated and price-sensitive. Loyalty must reinforce frequency and ancillary attachment without becoming a high-cost promise. That suggests borrowing partner discipline from LATAM, issuer scale from Azul, and simplicity from Copa—while avoiding complex elite-heavy constructs that don’t fit a point-to-point ULCC model.

How Loyalty Can Lift Yields Without Raising Fares

The most investor-friendly takeaway is how loyalty can improve economics without undermining the low-cost model. Yield, in this context, means total revenue per passenger—not base fare.

The clean levers are well understood: increase repeat purchase rates, boost ancillary attachment, shift bookings to direct channels, and monetize partnerships. What to avoid are hard-cost elite benefits, overgenerous redemptions that displace cash passengers, and complexity that drives service costs.

Best practice for ULCCs favors “soft benefits” and behavior-based rewards: earn boosters for bundles, member-only dynamic pricing, early access to sales, and cross-brand redemption as the headline value—not free bags or seats.

The December investor call made one thing clear: loyalty at Volaris and Viva will not be a Day One disruption. Near term, expect stability and incremental enhancements. Over the medium term, reciprocity across a much larger network is the most logical value unlock. Longer term, a group-level platform remains an option—if loyalty proves strategic enough to justify the complexity.

For now, loyalty is being positioned exactly where ULCC investors want it: as a supporting engine for demand, retention, and ancillary revenue—not as a costly reinvention of the business model.

Source: GLO