Skip to content

Airlines in Mexico Follow the Money Report

Opportunities for Change

Synthesizing the information from the M&A Movements, Investment and VC Movements, and New Entrants and Disruptors analyses for the Mexican airline industry in 2024-2025, several opportunities for change, particularly those receiving or influenced by investment, can be identified. While major transformative M&A or direct corporate venture capital investments into the core value chain entities were not prominent, investment is flowing into areas that support or respond to the evolving landscape.

The reports indicate a stable market structure regarding ownership of major airlines and airport operators. However, investment is evident in the following areas, signaling opportunities for change:

  1. Fleet Modernization and Expansion (Airline Operations & Aircraft and Fleet Management):

    • Both Aeroméxico and Volaris are engaged in fleet renewal and expansion through leasing agreements with international lessors like Air Lease Corporation and CDB Aviation. For instance, Air Lease Corporation confirmed new lease agreements with Aeromexico for nine new Boeing 737 aircraft, and CDB Aviation agreed to a sale and leaseback with Volaris for four new A320neo aircraft.
    • This represents an indirect form of investment into the "Aircraft & Fleet Management" and "Airline Operations" steps. Lessors, backed by their own capital and investment, are financing the acquisition of newer, more fuel-efficient aircraft.
    • Opportunity: This creates opportunities for MRO services specializing in new generation aircraft, for training providers for new aircraft types, and potentially for financial services supporting these complex lease agreements. It also signals a commitment to operational efficiency and potentially expanding route networks.

  2. Strengthening Airline Alliances and Partnerships (Airline Operations & Distribution & Sales):

    • The existing Aeroméxico-Delta joint venture and the proposed Viva Aerobus-Allegiant partnership (though the latter faced regulatory hurdles) indicate a strategic focus on expanding international reach and network connectivity.
    • While not direct investment in a traditional sense, these partnerships involve significant resource commitment and aim to capture larger market shares and offer more comprehensive travel options.
    • Opportunity: This fosters opportunities for enhanced interline agreements, code-sharing, and integrated loyalty programs. It also necessitates investment in harmonizing customer service and operational procedures, and potentially in shared technology platforms for smoother passenger experience and sales.

  3. Response to New Entrants (Airline Operations, Distribution & Sales):

    • The relaunch of Mexicana de Aviación, although with a small initial market share (0.46% in 2024), represents a state-backed investment into the "Airline Operations" step. Its objective of offering lower fares creates a potential shift in competitive dynamics on the routes it serves.
    • Opportunity: While Mexicana's funding is governmental, its presence may spur incumbent airlines to invest in strategies to maintain market share, such as loyalty programs, enhanced customer service, or more competitive pricing on overlapping routes. It also creates a new customer for support services, ground handling, and MRO.

  4. Addressing Infrastructure Bottlenecks and Workforce Shortages (Infrastructure, Support Services):

    • The reports highlight significant challenges with airport capacity (especially at AICM) and air traffic controller shortages. While direct large-scale private investments to solve these government-managed areas were not detailed, the recognition of these issues creates pressure and potential opportunities.
    • Opportunity: This signals a need for public investment in airport infrastructure and ATC recruitment/training. It could also create opportunities for private sector involvement in specialized areas like air traffic management technology, airport efficiency consulting, or training solutions. Airlines might invest in technologies or operational adjustments to mitigate the impact of these constraints (e.g., using alternative airports, optimizing turnaround times).

  5. Growth of Ultra-Low-Cost Carrier (ULCC) Model (Airline Operations, Distribution & Sales, Support Services):

    • The continued dominance and growth of Volaris and Viva Aerobus, financed through their own operational revenues and potentially debt/equity markets (though specific new large VC rounds in 2024-2025 weren't highlighted for these established players), reinforce the ULCC model's strength. Their focus on ancillary revenues is a key part of their financial strategy.
    • Opportunity: This drives ongoing investment in digital platforms for ancillary sales, customer segmentation tools, and partnerships for non-air travel products. The high aircraft utilization model of ULCCs also creates demand for efficient ground handling and quick MRO turnarounds, potentially attracting investment in these support areas if they can meet the ULCCs' stringent requirements.

In summary, while direct, large-scale equity investments or M&A reshaping the core of the Mexican airline value chain were limited in 2024-2025, "following the money" points towards investments in aircraft leasing (enabling fleet modernization), strategic alliances, responses to new competitive pressures, and the persistent need to address systemic inefficiencies. These areas represent ongoing opportunities for change and adaptation within the value chain.

Key Findings

Opportunity Area Value Chain Step(s) Impacted Nature of "Investment" / Change Driver Key Implication / Opportunity for Change
Fleet Modernization & Expansion Airline Operations, Aircraft & Fleet Management Aircraft leasing agreements (e.g., Aeroméxico with ALC, Volaris with CDB Aviation) financed by lessors. Modernization of fleets, potential for route expansion, increased demand for MRO for new aircraft types, training.
Strategic Alliances & Partnerships Airline Operations, Distribution & Sales Resource commitment to joint ventures (Aeroméxico-Delta) and proposed partnerships (Viva Aerobus-Allegiant). Expanded network reach, enhanced connectivity, need for operational/service harmonization, integrated technology platforms.
Response to New State-Backed Entrant (Mexicana) Airline Operations, Distribution & Sales, Support Services Government investment in Mexicana de Aviación. Potential for increased price competition, incumbent airlines may invest in competitive responses (loyalty, service). New customer for support services.
Addressing Infrastructure & Workforce Gaps Infrastructure (Airports, ATC), Support Services, Airline Operations Pressure from operational inefficiencies (AICM congestion, ATC shortages) rather than direct new large private investments. Need for public investment; potential for private sector in niche solutions (technology, training, efficiency consulting). Airlines invest in mitigation strategies.
Dominance of ULCC Model Airline Operations, Distribution & Sales, Support Services Continued operational success and market share growth of Volaris & Viva Aerobus, focus on ancillary revenues. Investment in digital platforms for ancillary sales, demand for efficient ground handling & MRO. Pressure on legacy carriers to adapt.
Adaptation to Supply Chain Disruptions Aircraft & Fleet Management, Airline Operations, Support Services (MRO) External pressure from global parts and aircraft shortages. Airlines and MROs may invest in better inventory management, alternative sourcing, or in-house repair capabilities. Potential for new MRO players or expansion of existing ones to meet localized demand.

References

  • Air Lease Corporation Confirms New Lease Agreements with Aeromexico for Nine New Boeing 737 Aircraft. https://www.businesswire.com/news/home/20221114005950/en/Air-Lease-Corporation-Confirms-New-Lease-Agreements-with-Aeromexico-for-Nine-New-Boeing-737-Aircraft
  • CDB Aviation and Volaris Agree to Sale and Leaseback of Four New A320neo Aircraft. https://www.cdbaviation.aero/2024/01/cdb-aviation-and-volaris-agree-to-sale-and-leaseback-of-four-new-a320neo-aircraft/
  • Mexicana transportó 256 mil de los 55 millones de pasajeros en vuelos nacionales en 2024; apenas 0.46% del mercado - Fábrica de Periodismo. https://fabricadeperiodismo.org/mexicana-transporto-256-mil-de-los-55-millones-de-pasajeros-en-vuelos-nacionales-en-2024-apenas-0-46-del-mercado/
  • Mexico Lacks 500 Air Controllers, Nearly Half Its Workforce - Bloomberg.com. https://www.bloomberg.com/news/articles/2024-07-23/mexico-lacks-500-air-controllers-nearly-half-its-workforce
  • U.S. Aviation Supply Chain Challenges: Parts Shortages, Rising Costs & Labor Resource Crunches - Magnetic Group. https://magneticgroup.co/news/u-s-aviation-supply-chain-challenges-parts-shortages-rising-costs-labor-resource-crunches/
  • Aeroméxico, lista para su oferta pública – El Financiero. https://www.elfinanciero.com.mx/empresas/2024/06/20/aeromexico-lista-para-su-oferta-publica/
  • Viva Aerobus gana más pasajeros que Aeroméxico y Volaris en 2023 - Forbes México. https://www.forbes.com.mx/negocios-viva-aerobus-gana-mas-pasajeros-que-aeromexico-y-volaris-en-2023
  • Note: References related to the general operational context and market shares are implicitly drawn from the summarized findings of the provided M&A, Investment/VC, and New Entrants reports, which themselves list extensive bibliographies. Specific new investment deals or M&A were largely absent in these reports for 2024-2025, hence the focus on indirect investment and operational financing.