Mexican low-cost airlines Volaris and Viva agree to merger

Two of Mexico's top low-budget airlines said Thursday they had agreed to merge, setting up a deal that could create one of the country's largest domestic carriers.

The airlines, Viva and Volaris, said the plan would expand access to low-cost air travel in Mexico.

Under the agreement, the companies would continue to operate under their existing brands and maintain their own operations, the groups announced in a joint statement.

"We expect the formation of the new airline group will allow us to realize significant growth opportunities for air travel in Mexico," said Enrique Beltranena, president and CEO of Volaris.

The deal, expected to close in 2026, is subject to regulatory approval in Mexico and could draw opposition from the budget airlines' main competitor, Aeromexico.

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The potential merger comes amid some instability in the country's aviation industry. In October, the US Department of Transportation canceled plans for more than 13 routes to the US for Mexican airlines.

Washington made the decision after accusing Mexico of having "illegally cancelled and frozen US carrier flights for three years without consequences."

Mexican President Claudia Sheinbaum pushed back on the decision, but in November said the country would give more flight slots to US carriers at its capital, according to media reports.

bur-lga/fox