The Volaris–Viva Aerobus merger: Cross-border antitrust and aviation regulatory considerations

In December 2025, Mexico’s two largest ultra-low-cost carriers (ULCCs) – Volaris and Viva Aerobus – announced an agreement to combine their holding companies in a transaction structured as a merger of equals. The combined entity, Grupo Más Vuelos, would hold a substantial share of Mexico’s domestic passenger market – approximately 69 percent of passengers carried through October 2025, according to Reuters, and roughly three-quarters of domestic departing seats, according to industry analyses – creating the country’s largest airline group by a wide margin over Aeroméxico in domestic traffic.

On March 9, 2026, Volaris submitted an information memorandum describing the merger mechanics: Viva will merge into Volaris as the non-surviving entity, with Viva shareholders receiving approximately USD1.08 billion of newly issued Volaris shares, leaving each shareholder group with approximately 50 percent of the combined company on a fully diluted basis.

Volaris shareholders overwhelmingly approved the merger on March 25, 2026, with 91.8 percent of outstanding share capital voting in favor and no votes against – Viva's required corporate approvals having already been adopted by unanimous written resolutions – and management has indicated the regulatory review process could take up to 12 months from announcement. The information memorandum identifies closing conditions, including authorization in Mexico, expiration or termination of the applicable waiting period under the United States Hart-Scott-Rodino (HSR) Act, and authorization from the Colombian Civil Aviation Authority.

While the transaction is principally a Mexican domestic matter, its closing conditions expressly require regulatory approvals or non-objections in Mexico, the US, and Colombia.

Our alert examines the merger’s antitrust landscape, the US regulatory requirements, and the broader implications for carriers operating in the US–Mexico market.

Transaction structure and market context

Under the terms of the agreement, Volaris and Viva will combine their respective holding companies, with each carrier retaining its brand, air operator certificate, concession titles, management team, and independent commercial operations. The parties say they intend to preserve separate brands and operations, with no immediate passenger-facing changes to routes, fares, or ticketing. At the corporate level, however, the transaction places two direct competitors – carriers that together account for roughly three-quarters of Mexico’s domestic departing seats and overlap on more than a quarter of all domestic city-pair markets – under common ownership and a single board of directors.

Both carriers operate Airbus A320-family fleets exclusively and employ similar point-to-point, ultra-low-cost business models. According to the parties’ December 2025 investor presentation, the combined fleet would total approximately 251 A320-family aircraft (152 at Volaris and 99 at Viva), compared to Aeroméxico’s approximately 161. The Volaris network is primarily focused on Tijuana and Guadalajara, while Viva’s network is concentrated in Monterrey, Mexico City, and Felipe Ángeles International Airport (AIFA). However, the route overlap is substantial.

Mexican competition review under the National Antitrust Commission

The transaction is subject to mandatory pre-closing antitrust review in Mexico. Following the 2024–2025 constitutional and legal reforms, merger review authority now rests with Mexico’s National Antitrust Commission, or the Comisión Nacional Antimonopolio (CNA), which replaced the former Federal Economic Competition Commission (COFECE) and absorbed certain competition functions previously exercised by the Federal Telecommunications Institute (IFT). The Volaris–Viva merger may be among the first large-scale concentration cases decided entirely under this new institutional framework.

The CNA’s institutional position is noteworthy. Unlike COFECE, which operated as a constitutionally autonomous body, the CNA sits within the executive branch of the Mexican government under the Mexican Secretariat of Economy. Mexico’s President, Claudia Sheinbaum Pardo, has publicly characterized the merger as “good news” for investment, tourism, and competition, while stating that it must comply with competition law. The CNA is positioned to conduct its initial high-profile review, reflecting both the regulatory responsibilities and public attention surrounding the merger.

The substantive analysis will likely rely on several factors, including:

• Market definition. Whether the CNA defines the relevant market broadly as all domestic aviation or more narrowly as the ultra-low-cost segment may significantly affect concentration metrics. On a passenger basis, the two carriers together represented approximately 69 percent of domestic traffic through October 2025. On a seat-share basis, industry analyses place their combined share at roughly three-quarters of domestic departing seats. Even under a broader market definition including Aeroméxico, the concentration is exceptional by international standards.
  
  
• Overlapping routes. Schedule data indicates that Volaris and Viva compete head-to-head on more than 25 percent of domestic markets. Outside Mexico City, where Aeroméxico retains a meaningful presence, the two ULCCs often face limited third-carrier competition on most domestic routes.
  
  
• Barriers to entry. Airport congestion, slot scarcity – particularly at Mexico City International Airport (AICM) – fleet availability, and regulatory approvals are structural barriers that limit the disciplining effect of potential new entrants. The CNA may assess whether these barriers would enable the exercise of market power by the combined entity.
  
  
• Remedies. Conditional clearance – involving structural and access remedies, such as slot divestitures at constrained airports and capacity commitments on overlapping routes – is one plausible outcome. However, the CNA is a new institution operating under a reformed legal framework, and the range of outcomes includes unconditional approval, conditional clearance with varying degrees of remedy stringency, extended review with additional information requests, or prohibition. Commentators have noted that concentration levels of this magnitude are exceptional by international standards, but the CNA’s approach to its first major case remains to be seen.

US and multi-jurisdictional regulatory requirements

Although the merger is structured as a domestic Mexican transaction, the parties’ information memorandum expressly identifies US HSR Act clearance and Colombian Civil Aviation Authority authorization as closing conditions alongside CNA approval. The transaction also intersects with US aviation regulatory authority in several respects:

• Foreign air carrier licensing. Both Volaris and Viva hold foreign air carrier permits issued by the US Department of Transportation (DOT) authorizing scheduled and charter service between Mexico and the US. Under 49 U.S.C. § 41302 and DOT’s implementing regulations, a change in ownership or control of a foreign air carrier holding DOT economic authority may require permit amendments and updated ownership and control disclosures. Because the merger places both carriers under a common holding company, DOT may require such filings and could use this review to assess whether continued authorization serves the public interest in light of conditions in the US–Mexico market.
  
  
• Bilateral context. The merger review unfolds amid tension in US–Mexico aviation relations. In 2025, DOT rejected 13 current or planned Mexican carrier routes to the US, canceled combination service between the US and AIFA, froze growth in certain combination services between the US and AICM, imposed schedule filing requirements on Mexican carriers, and issued a final order terminating antitrust immunity for the Delta–Aeroméxico joint venture – an order that is currently stayed pending appeal before the Eleventh Circuit. DOT Secretary Sean P. Duffy has stated that Mexico has “illegally canceled and frozen US carrier flights for three years without consequences.” A Mexican domestic merger that further concentrates the market could impact ongoing bilateral discussions, even if DOT does not exercise formal review authority over the transaction itself.
  
  
• Schedule filing requirements. Since July 2025, DOT has required certain Mexican carriers – including both Volaris and Viva – to file schedules for all US operations and obtain prior DOT approval for large charter flights. These requirements remain in effect and would apply to the combined entity’s transborder operations post-closing.

Implications for US and international carriers

The Volaris–Viva combination, if approved, could change competitive dynamics across the US–Mexico aviation market in several ways:

• Codeshare and interline partners. US carriers that currently codeshare or interline with either Volaris or Viva are encouraged to assess whether common ownership changes the competitive calculus of those arrangements, and whether DOT would view continued partnerships differently in light of the combined entity’s market position.
  
  
• Transborder competition. The merged entity would operate the largest combined US–Mexico transborder network among Mexican carriers. US carriers competing on these routes may face a more formidable competitor with enhanced scale, fleet flexibility, and purchasing power.
  
  
• Slot and capacity remedies. If the CNA imposes structural remedies, such as slot divestitures at AICM or other constrained airports, this could create entry opportunities for competing carriers – potentially including US operators or new Mexican entrants – depending on how the remedies are structured and administered.
  
  
• Alliance implications. Aeroméxico, as the only other nationwide domestic competitor, could face a dominant domestic rival while simultaneously navigating the potential loss of its Delta joint venture antitrust immunity (if the Eleventh Circuit ultimately upholds DOT’s termination order). The interaction between these proceedings may impact the competitive landscape for international alliances serving Mexico.

What to watch

The transaction is still in its early stages, with the Volaris shareholder vote held on March 25, 2026, and the CNA’s review potentially extending through the end of 2026. Key developments to monitor include:

• CNA market definition and timeline. How the CNA defines the relevant market may determine the analytical framework and outcome. Under Mexico’s reformed Federal Economic Competition Law, Article 90 provides 30 days (as of the filing’s completion) for the CNA to resolve a notified concentration, with up to 20 additional days in exceptionally complex cases. In practice, however, large transactions routinely extend beyond these statutory periods, and management guidance suggests approximately a 12-month horizon.
  
  
• Aeroméxico opposition. Aeroméxico may oppose the merger during the CNA’s review. If it does, its submissions could shape the scope of any remedies.
  
  
• DOT foreign carrier permit review. Whether DOT initiates a review of Volaris’s and Viva’s foreign air carrier permits in connection with the change of control, and whether any such review is used to advance broader bilateral objectives.
  
  
• Eleventh Circuit ruling on Delta–Aeroméxico antitrust immunity. The appellate outcome could affect both Aeroméxico’s competitive posture and DOT’s broader approach to Mexican aviation matters.

Learn more

For more information, please contact the authors.