Business · Companies · 6 hrs ago
GAP warns of risks from proposed Viva Aerobus-Volaris merger
Viva Aerobus and Volaris have proposed joining into one airline group in a merger that remains under review in Mexico.
Airport operator GAP is concerned about the effects because Volaris relies heavily on Guadalajara and Tijuana airports, which GAP operates.
The two airlines could hold up to 73% of the market, while the aviation authority says the merger would bring half of Mexico’s operating aircraft under one company.
GAP chief executive Raúl Revuelta warned that an unrestricted merger could leave the country vulnerable if the company made serious mistakes or went bankrupt.
The merger could also reduce competition and raise concerns about fares, though its actual effects are not yet known.
The proposal could also create room for new airlines if demand grows and fuel prices fall.
Mexico’s antitrust authority is expected to decide next year, after the deal received approval in Colombia and the United States.
GAP chief executive Raúl Revuelta warned that an unrestricted Viva Aerobus-Volaris merger could create risks for Mexico’s air transport system.
The combined airlines would have up to 73 percent of the market, while aviation authority data cited in the report put their share of operating aircraft at 50 percent.
Revuelta said problems at a merged airline could leave the country disconnected and cause major disruption.
The merger proposal is under review by Mexico’s National Antitrust Commission, and its decision is expected next year.
Revuelta said the merger could also create an opening for new airlines if air travel demand grows and fuel prices fall.
- Who
- GAP, the airport operator, has raised concerns about the proposed merger of Viva Aerobus and Volaris.
- What
- The proposed merger could concentrate up to 73 percent of the airline market and half of the country’s operating aircraft in one company.
- When
- The proposal was requested at the end of last year. Mexico’s antitrust decision is expected next year.
- Where
- Mexico; GAP operates 12 airports in the country.
- Why
- GAP says the concentration could create disruption if the merged airline faced problems. It also sees a possible opening for new airlines if demand grows and fuel prices fall.
This story does not have two clearly opposing sides.
Viva Aerobus and Volaris requested the merger.
The merger received approval in Colombia and the United States.
Mexico’s National Antitrust Commission was examining the proposed concentration.
The Mexican antitrust authority’s response was expected.
- Airports operated by GAP
- 12 in Mexico
- Combined airline market share
- Up to 73 percent
- Share of operating aircraft
- 50 percent, according to aviation authority data
- Passenger share cited in article
- 80 percent
- Foreign approvals
- Colombia and the United States
What people are saying
An eventual full approval is worrying; beyond economic decisions, a bad decision in its fleet planning or something that leads them to bankruptcy would leave the country completely disconnected.
It is a lot of playing at crystal-ball gazing; what is certain is that there will be an impact from the Viva and Volaris merger, yes, but we do not yet know what it will be.
If the merger results in less supply and travel prices rise a lot, if fuel prices return to the range of 60 (...) there could be new airlines.