Mexico: An Aviation Overview

Mexico’s aviation sector entered 2026 in the middle of a real transformation. After years of regulatory turbulence, strained relations with the United States, a bumpy post-COVID-19 pandemic recovery, accelerated GTF engine disk inspections, high fuel prices and other challenges, the market is now working through three developments that will shape its future – namely:

• the proposed merger between Volaris and Viva Aerobus;
• a hard-fought preliminary agreement with Washington over airport slots and the sanctions imposed by the US government; and
• the broader implications of the United States-Mexico-Canada Agreement (USMCA) review for an industry that sits squarely at the intersection of trade, sovereignty and connectivity.

A Market Reshaped: The Volaris–Viva Aerobus Merger

In December 2025, Mexico’s two largest low-cost carriers announced an agreement to combine their holding companies under a new entity, Grupo Más Vuelos. Under the new structure, both airlines will keep their existing brands and independent operating certificates, while each shareholder group shall end up holding around 50% of the combined entity. The scale of the transaction is hard to overstate; together, Volaris and Viva Aerobus carried roughly 69% of domestic passengers through October 2025 (Reuters) and held approximately three quarters of domestic departing seats – making the combined entity the country’s largest airline group by domestic traffic, by a wide margin.

Regulatory review by Mexico’s competition authority, the newly created Comisión Nacional Antimonopolio, is under way – a process that could take up to 12 months from the date of announcement. The transaction will also draw scrutiny from US authorities, given both carriers’ extensive cross-border operations.

For the Mexican market, the merger raises real questions. Proponents argue that fleet commonality – both carriers fly exclusively Airbus A320 family aircraft – and network complementarity will generate efficiencies that flow through to lower fares and broader connectivity. Critics, including Aeroméxico, which holds roughly a third of the domestic market, could be expected to push back against a consolidation that would inevitably concentrate the competitive field. For lawyers, financiers, lessors and lessees with existing exposure to either carrier, the merger is already raising immediate questions about consent requirements, change-of-control provisions, and the integrity of existing lease and financing arrangements.

Resolving the Bilateral Treaty Dispute: A Fragile but Meaningful Step

The bilateral aviation dispute between Mexico and the United States, which escalated sharply through 2025, has reached a cautious pause. Starting in 2022, the López Obrador administration progressively cut slot capacity at Mexico City International Airport (AICM) – from 61 down to 43 operations per hour – and banned cargo carriers from the airport altogether, rerouting them to the newer but far more distant Felipe Ángeles International Airport (AIFA). Washington’s position was clear throughout: these moves breached the 2015 bilateral Air Transport Services Agreement between the two countries and amounted to the unilateral privation of rights that US carriers had legitimately held.

The USA reacted in October 2025 by revoking 13 routes operated by Aeroméxico, Volaris and Viva Aerobus to points in the United States and blocking any further growth of Mexican carriers at US airports. The US Department of Transportation also ordered the termination of the already long-lasting Delta–Aeroméxico anti-trust immunity in September 2025. At the behest of both carriers, an appellate court issued a stay in November, keeping the partnership running while the litigation plays out.

In May 2026, the two countries reached a preliminary agreement to the aforementioned dispute. Mexico agreed to conduct a technical slot capacity study at AICM benchmarked to international standards, roll out a digital slot management system, and ensure fair and transparent access to slots for US carriers; in exchange, the USA would formally recognise AIFA within the bilateral airport framework as part of the Mexico City airport system, and would permit the opening of the cancelled services by Mexican carriers between Mexico and the United States. Prior to this agreement, Mexican airlines had already handed back six AICM slots to US carriers in late 2025 as a show of good faith, while the Federal Civil Aviation Agency (Agencia Federal de Aviación Civil; AFAC) authorised a modest increase in AICM operations from 44 to 46 per hour, subject to infrastructure upgrades, with the 2026 FIFA World Cup firmly in mind.

The deal remains preliminary, and the Department of Transportation (DOT) has been explicit: restrictions stay until Mexico delivers on the agreed reforms. A bilateral working group of Ministry of Infrastructure, Communications and Transport and DOT officials will keep tabs on progress. For operators, lessors and financiers active in the Mexico–US corridor, the way forward is now visible – but getting there depends on regulatory follow-through, not just diplomatic promises.

The USMCA Review: Aviation in the Shadow of Trade

Aviation services are formally excluded from the USMCA, but the uncertainty surrounding the agreement’s mandatory joint review is something the sector cannot ignore. The review, which carried a formal deadline of 1 July 2026, has become a defining feature of Mexico’s broader economic climate – affecting investment decisions, supply chains and bilateral relations in ways that inevitably reach the aviation market.

The concern is less about any specific aviation provision and more about the general environment that the review is creating. Mexico’s airlines, lessors and financiers operate in a market that depends heavily on cross-border flows of capital, equipment and people. When the terms of North American trade are uncertain, that uncertainty travels; fleet investment decisions get delayed, financing structures require more careful calibration, and counterparties on both sides of the border become more cautious about long-term commitments.

The July 1st deadline is unlikely to bring a clean resolution. As expressed by the United States, the treaty will be subject to a ten-year annual review cycle, instead of the anticipated 16-year renewal. For an industry that runs on long planning horizons and depends on regulatory predictability, a prolonged period of trade uncertainty is not just an inconvenience – it is a genuine headwind that practitioners and their clients will need to factor into how they structure and think about transactions in Mexico for the foreseeable future.

Looking Ahead

Mexico’s aviation market has shown time and time again its strong resilience and that it can take a hit and keep moving. Domestic passenger volumes reached 22.4 million in the first half of 2025, up 8.2% year over year, and airports across the country are enjoying the surge that the 2026 FIFA World Cup has brought. More complex than ever is the legal and regulatory environment surrounding that growth. The announced merger review, the slot implementation process, the USMCA negotiations, high fuel prices and the resultant reduction in capacity to mitigate cost are all occurring at the same time, each on their own clock and each capable of shifting the landscape in ways that matter. For those doing business in Mexican aviation, the market remains active and the opportunities are real – but so is the need to stay on top of how these threads are moving and what they mean for the transactions on the table.