Analysis
It appears as if COVID-19 has ushered in some consolidation in Mexico’s market, but not in the traditional forms of mergers and acquisitions. Even before the COVID-19 crisis, there were calls for consolidation of airlines in Mexico.
The market shifts have occurred due to the shrinking of two of country’s larger airlines in the wake of the pandemic. A form of unconventional consolidation has occurred, and Mexico’s ultra-low cost carriers are the biggest beneficiaries.
As a result of the changes, and as the aviation industry looks toward recovery, Mexico’s market composition could ultimately feature two ultra-low cost operators and one full service airline.