Mexico’s antitrust authority, the CNA, is expected to approve the planned merger between budget carriers Volaris and Viva Aerobus by the end of 2026, according to a report by Reuters. The deal will combine the two airlines under a new entity named Grupo Mas Vuelos, creating Mexico’s largest airline group.

Sources familiar with the matter indicate that the approval will come with minimal operational restrictions, though regulators plan to attach specific conditions to protect consumers and workforce stability. The CNA is expected to require Mas Vuelos to maintain its low-cost model, cap a percentage of fares within regional market averages, avoid widespread layoffs, and preserve existing flight routes due to limited competition on many paths.

Together, Volaris and Viva Aerobus control roughly three-quarters of Mexico’s domestic flight market. A Reuters analysis of route data shows the carriers overlap on 85 domestic routes and that Mas Vuelos will become the sole operator on 55 of them, particularly around key hubs in Guadalajara and Monterrey. Despite this heavy concentration, regulators plan to leave the group’s flight allowances (slots) at major airports largely intact, rather than forcing significant divestitures.

The merger comes after years of financial strain for both carriers following the pandemic, exacerbated by jet fuel price volatility and widespread fleet groundings caused by required Pratt & Whitney engine inspections. Neither airline filed for restructuring or received government bailouts during the pandemic, making the tie-up a strategic necessity to stabilize operations.

Industry analysts note the decision serves as a high-stakes early test for the CNA, which replaced Mexico’s former competition commission last year. Sources also pointed to political support for the deal, noting that both carriers have committed to boosting flight frequencies at state-run hubs, including Tulum Airport and Mexico City’s Felipe Angeles International Airport.

While the merger has already secured antitrust clearances in the United States and Colombia, domestic rival Aeromexico has voiced opposition, raising concerns over whether the proposed regulatory conditions will effectively curb Mas Vuelos’ overwhelming market dominance.