AIRLINES & ALLIANCES

Volaris and Viva Aerobus Announce Historic Merger to Form New Mexican Airline Group

Volaris

Mexico City, December 18, 2025 — Mexico’s two largest ultra-low-cost carriers, Volaris and Viva Aerobus, announced a definitive agreement to merge under a newly created airline holding company, marking one of the most significant consolidations in Latin American aviation history. The transaction aims to accelerate affordable air travel, improve connectivity, and strengthen the long-term competitiveness of Mexico’s aviation sector.

Under the agreement, the two airlines will combine at the holding-company level, while continuing to operate as separate brands with independent air operator certificates. This structure is intended to preserve consumer choice, route diversity, and brand identities, while enabling financial and strategic synergies behind the scenes.

Transaction Structure

The merger is structured as a merger of equals. Upon closing, Viva Aerobus shareholders will receive newly issued shares of the Volaris holding company, resulting in 50/50 ownership on a fully diluted basis between current Viva and Volaris shareholders. Volaris will remain publicly listed on both the New York Stock Exchange (NYSE) and the Bolsa Mexicana de Valores (BMV).

The boards of directors of both companies have unanimously approved the transaction.

Strategic Rationale

According to the joint press release, the formation of the new airline group is designed to:

• Expand access to ultra-low-fare air travel

• Strengthen domestic and international connectivity

• Improve access to capital markets

• Reduce aircraft ownership, financing, and leasing costs

• Increase resilience through scale while maintaining operational independence

The group will continue to focus on point-to-point travel, a cornerstone of the low-cost model in Mexico.

Impact on Passengers, Employees, and Communities

Both airlines emphasized that customers will continue to benefit from competitive fares, broad route networks, and differentiated service offerings under each brand. Employees will remain with their respective airlines, with no immediate changes to labor agreements or operating structures.

The combined group expects the transaction to support tourism growth, regional economic development, and improved air access across underserved markets in Mexico and beyond.

Governance and Leadership

The new airline group will be governed by a board composed of representatives from both companies. Roberto Alcántara Rojas, current Chairman of Viva Aerobus, will serve as Chairman of the new holding company.

Regulatory Approvals and Timeline

The merger is subject to customary closing conditions, including regulatory approvals and shareholder consent. The companies expect the transaction to close in 2026.

Industry Context

Once completed, the combination of Volaris and Viva Aerobus will create the dominant low-cost airline group in Mexico’s domestic market, positioning it as one of the largest ultra-low-cost airline groups in Latin America. The move reflects broader global airline consolidation trends aimed at achieving scale, cost efficiency, and financial sustainability.

Implications for Loyalty Programs, Rewards, and Customer Experience

In their official announcement, Volaris and Viva Aerobus did not disclose immediate changes to their existing loyalty programs, signaling that current loyalty structures, rewards accrual, and redemption mechanics will remain unchanged at launch. By retaining separate brands and operating certificates, both airlines are expected to continue managing their loyalty and ancillary revenue strategies independently in the near term.

However, the creation of a shared holding company introduces meaningful medium- to long-term implications for loyalty and customer engagement. At a group level, the combined scale offers opportunities to harmonize technology platforms, customer data infrastructure, and partnership strategies—potentially enabling cross-brand benefits without fully merging programs.

Key implications include:

• Expanded Partnership Potential: Greater scale may enhance the group’s ability to negotiate with financial institutions, payment networks, retailers, and travel partners, strengthening co-branded cards, earn-and-burn opportunities, and coalition partnerships.

• Improved Personalization: Shared insights across brands could support more sophisticated segmentation, targeted offers, and personalized ancillary bundles while respecting brand differentiation.

• Experience-Led Loyalty: With price-sensitive customers at the core, loyalty differentiation is likely to focus less on traditional mileage rewards and more on experience-based benefits, such as priority services, flexibility options, bundled ancillaries, and frictionless digital journeys.

• Optional Cross-Brand Benefits: Over time, the group could explore reciprocal recognition, limited-status matching, or cross-brand earning opportunities, providing incremental value without fully integrating loyalty programs.

The companies emphasized that customer choice and simplicity remain priorities, suggesting any loyalty evolution will be gradual, data-driven, and designed to avoid complexity or dilution of brand value.

Global Loyalty Organisation Take

From a loyalty and customer-engagement perspective, the Volaris–Viva Aerobus merger presents both opportunity and risk. Maintaining separate brands allows each airline to preserve its unique customer proposition, but the creation of a shared holding company opens the door to backend integration of data, partnerships, and loyalty infrastructure.

If executed thoughtfully, the group could unlock significant value by aligning loyalty strategies, improving personalization, and expanding coalition partnerships—particularly in payments, retail, and travel ecosystems. However, success will depend on avoiding customer confusion, protecting brand trust, and ensuring that loyalty programs remain simple, transparent, and value-driven in a price-sensitive market.

Ultimately, the merger has the potential to redefine how low-cost airlines in Latin America approach loyalty—not as a cost center, but as a strategic growth lever.

Appendix: Volaris Investor Call Takeways (19 December 2025) 

• Volaris and Viva announced a merger of equals to create a new airline holding company while preserving two independent airline brands.
• The new group will be named Grupo Más Vuelos, listed on both the NYSE and Mexican Stock Exchange.
• Ownership will be 50/50 between Volaris and Viva shareholders.
• The transaction is focused on scale, lower costs, stronger balance sheet, and demand-driven growth, not operational consolidation.
• Significant value expected from aircraft ownership cost reductions, procurement scale, and improved access to capital.
• Management emphasized preserving competition, ultra-low-cost DNA, and consumer choice.
• Expected closing timeframe: within ~12 months, subject to regulatory and shareholder approvals.

Transaction Announcement – Structure & Governance

• Merger of equals between the Volaris and Viva holding companies.
• New holding company:
  • Name: Grupo Más Vuelos
  • Publicly listed on NYSE and BMV (new ticker TBD).
• Ownership split: 50% Volaris shareholders / 50% Viva shareholders.
• Brands & operations remain separate:
  • Separate Air Operator Certificates (AOCs)
  • Separate management teams
  • Independent brands and service models
• Board structure:
  • 12-member board: 6 Volaris, 6 Viva
  • Chair: Roberto Alcántara Rojas (current Viva Chairman)
• Leadership continuity:
  • Enrique Beltranena remains CEO of Volaris
  • Juan Carlos Zuazua remains CEO of Viva

Strategic Rationale

• Accelerate the democratization of air travel in Mexico and cross-border markets.
• Mexico remains underpenetrated in air travel vs. comparable emerging markets.
• Maintain ultra-low fares to stimulate demand among fare-sensitive customers.
• Strengthen connectivity:
  • Domestic Mexico
  • U.S.–Mexico cross-border market (~40M passengers annually)
  • Latin America
• Support economic development in underserved regions:
  • Each new aircraft ≈ 60 direct jobs + ~240 indirect jobs
• Preserve competition while achieving holding-company-level efficiencies.

Scale & Network

• Combined footprint:
  • 320+ routes
  • 85+ destinations
• Fleet:
  • 250+ Airbus A320 family aircraft
  • 200+ aircraft on order
  • Estimated future aircraft investment up to $14 billion
• Strong presence in key regions:
  • Monterrey, Guadalajara, Cancun, Tijuana
  • Expansion potential at AIFA (new Mexico City airport)
  • Mid-sized and underserved regional airports

Financial Profile & Synergies

Balance Sheet & Leverage

• Pro forma net debt / EBITDAR: ~2.7x
• Stronger combined balance sheet:
  • Better capitalization
  • Improved liquidity
  • Enhanced access to capital markets

Cost Synergies (Primary Focus Areas)

• Aircraft ownership costs (largest cost line):
  • ~33–35% of total costs
  • Significant upside from scale and improved financing
  • Potential to narrow gap vs. global peers with up to 60% lower ownership costs
• Procurement synergies:
  • Aircraft financing
  • OEM negotiations (Airbus)
  • Parts, maintenance, suppliers
• Fleet strategy flexibility:
  • Mix of operating leases, finance leases, sale-leasebacks
  • Ability to manage Airbus NEO delivery delays and AOG issues jointly
• Result: Reinforcement of one of the lowest ex-fuel unit costs globally

Growth Strategy Post-Merger

• Demand-driven capacity growth (no forced growth from the merger).
• Continued focus on:
  • Low complexity operations
  • Ultra-low fares
  • High utilization of A320 family fleet
• Reinvestment of efficiencies into:
  • New routes and frequencies
  • Technology and infrastructure
  • Employee training
  • Customer experience and loyalty programs

Regulatory & Approval Process

• Approvals required from:
  • Mexican competition authorities (new agency)
  • Colombia
  • United States (notifications)
  • Shareholders of both companies
• Management:
  • Confident in transaction merits
  • Emphasizing consumer benefits, competition preservation, and economic impact
  • Not speculating on remedies at this stage
• Expected closing: within ~12 months, subject to approvals

Valuation & Ownership Logic

• Enterprise Value:
  • Volaris ~60%
  • Viva ~40%
• Equity Value adjustment:
  • Volaris has higher net debt (~$3.1B vs. Viva ~$1.9B)
• Resulting equity contributions support a 50/50 ownership split
• Supported by a fairness opinion from Morgan Stanley
• Both shareholder bases share equally in upside from scale and synergies

Key Risks & Challenges Highlighted

• Regulatory review complexity (3-to-2 market structure concern).
• Timing and uncertainty around approvals.
• Execution of fleet cost reductions amid Airbus/Pratt & Whitney disruptions.
• Need to maintain cultural alignment and operational discipline—though management emphasized strong similarity between the two companies.

Source: Volaris / GLO