Analysis Reports

Viva and Volaris' proposed merger marks a potentially transformative moment for Mexico's aviation market, one shaped decisively by low-cost carriers over the past two decades.

Together, the two airlines have played a central role in expanding access to air travel, helping grow Mexico's passenger numbers from fewer than 50 million in 2009 to nearly 120 million in 2024.

Their tie-up aims to create scale in an increasingly constrained global aviation environment, with both carriers arguing that a combined fleet of more than 250 Airbus A320-family aircraft would materially reduce aircraft ownership costs - the single largest expense category for airlines in the region.

The proposal, however, raises unavoidable questions around market concentration. Viva and Volaris together account for roughly three-quarters of Mexico's domestic departing seats, far eclipsing flag carrier Aeromexico.

Regulators will need to weigh those figures carefully against the airlines' contention that the merger will ultimately benefit consumers through lower costs, greater network resilience, and sustained capacity growth.

Encouragingly for the carriers, early signals from Mexico's government - including supportive remarks from President Claudia Sheinbaum - suggest a pragmatic view that prioritises investment, tourism, and competitiveness.

The transaction also reflects a broader Latin American trend toward consolidation, echoing earlier integrations such as at LATAM Airlines, Avianca, and more recent developments within the Abra Group.

Whether or not the Viva-Volaris deal clears regulatory hurdles, it has already reframed the debate around competition, affordability, and scale in Mexico.

The country's aviation market stands on the cusp of a pivotal period during 2026, with the outcome likely to shape its structure for years to come.

Governments are often no friend of the air transport business, and especially so of the airport sector.

In the UK the current government has approved multiple airport expansion projects during the past year or so, including the third runway at London Heathrow Airport (a project that is as old as time).

But then it revises the rating system for businesses of all shapes and sizes, relieving them of support based on the impact of the COVID-19 pandemic, which all but saw off the industry.

The consequence is that all of these airport expansion and refurbishment projects will have to be re-examined in the light of these valuations, which will add millions of pounds to bills.

Regional airports, in particular, will be especially impacted, and costs will rise all the way down to the passenger.

This while the government is trying to identify and promote the UK as a global aviation hub.

There is a light at the end of the tunnel.

The government consistently flip-flops all over the place and already seems set to backtrack on rate rises for some High Street businesses, with more to follow.

Will that have a result of a similar reappraisal for the airports though, or will their bills go up even more?

India's two largest airlines enter 2026 looking to make more progress on their ambitious growth agendas, but the airlines - and their CEOs - will have to contend with heightened scrutiny from regulators and their own boards.

Both IndiGo and Air India experienced high-profile setbacks in 2025. For Air India, the investigation continues into the crash of flight AI171 in Jun-2025, while the airline's fleet upgrade and financial turnaround are taking longer than expected.

For IndiGo, a network meltdown in early Dec-2025 brought the ire of regulators and politicians, meaning the airline will likely take a more cautious approach to growth this year.

The two airlines are both led by CEOs who were hired from overseas airlines within two months of each other in 2022: Campbell Wilson at Air India, and Pieter Elbers at IndiGo.

They are highly regarded executives in the airline industry who were sought out to lead India's airlines through crucial growth phases, but they are now facing increasing political and public pressure.

At the CAPA Airline Leader Summit - World in Dec-2025, a rare, candid boardroom-style conversation brought together airline leaders operating at the sharp end of today's volatility cycle.

Moderated by WestJet Vice Chairman Alex Cruz, the discussion featured Anko van der Werff (SAS Scandinavian Airlines), Martin Gauss (Gulf Air) and Campbell Wilson (Air India), each navigating markedly different geographies yet confronting strikingly similar structural pressures.

The backdrop is unforgiving: slowing global growth, persistently high interest rates, elevated fuel and financing costs, currency instability and deepening geopolitical fragmentation. Layered on top are acute supply chain constraints - from delayed aircraft deliveries to extended engine shop visits - that continue to cap growth and inflate unit costs.

Against this landscape, the panel explored how airlines with traditionally thin margins can protect balance sheets, sustain networks and retain strategic optionality.

Drawing on current, real-world challenges, the session examined fuel and FX risk management in an era of amplified price swings; inflationary pressures across labour, maintenance and airport charges; and the emerging reality that geopolitics increasingly shapes network economics.

The executives also addressed the growing divergence between mature markets facing demand fragility and emerging markets - most notably South Asia and parts of the Middle East - where structural growth remains intact but operational and political risks are higher.

This session offers senior aviation leaders a grounded, experience-led perspective on how airline CEOs are recalibrating long-term planning, capital allocation and fleet utilisation to survive - and selectively invest - through a prolonged period of uncertainty.

As 2026 begins, CAPA - Centre for Aviation presents a snapshot of the global airline industry in 22 numbers.

The airline industry has demonstrated its resilience in recovering from the COVID-19 pandemic and exceeding its 2019 levels of traffic, capacity, jets in service, and financial returns.

Nevertheless, the return on capital generated by the world's airlines remains below the cost of capital at a time when huge investment is needed to finance the green transition.

Moreover, macro uncertainties are gathering in the form of geopolitical developments, conflicts, world trade and artificial intelligence.

In addition, industry supply chain uncertainties - including the availability of aircraft, engines, labour and infrastructure - remain challenging.

Based on a presentation given at the CAPA Airline Leader Summit World in Lisbon in Dec-2025, with updated numbers as appropriate, this graphic report summarises a range of key aviation metrics in 22 headline numbers.

Belatedly there was an outbreak of airport-related M&A activity in the final quarter of 2025, initially with major transactions in Europe and then as widespread as Brazil, Russia, Northern England, Poland, Belgium, Angola, Guinea, Egypt, and even the United States, although that was only a retail concessions deal.

They are detailed in this report.

But while the outlook rapidly changed for the better then, the stark realisation is that (to use the 'Chinese proverb/curse' that isn't) we "live in interesting times" now. And those times are not the ones that investors feel comfortable in.

Quite apart from the rolling impediments to long term investment in the sector already arising from 'forever wars' and the uncertainty of the global economic cycle, we now have to contend with an expansionist United States.

The outlook for the entire year and beyond in the airport sector may well be determined by what happens in the coming days and weeks.

The aircraft interiors sector in 2025 was defined by momentum, convergence and a clear re-ordering of long-established hierarchies.

Connectivity, cabins and comfort are no longer parallel workstreams, but increasingly interdependent pillars shaping airline competitiveness.

This latest CAPA - Centre for Aviation interiors report captures a year in which strategic decisions made at the cabin level signalled broader shifts in airline priorities, supplier power and passenger expectations.

At the centre of the story is inflight connectivity. The pace and scale of Starlink's ascent has been without precedent, transforming what was once a fragmented IFC market into a race for LEO-led performance and simplicity.

Beyond connectivity, 2025 also brought meaningful evolution in IFE and seating.

Safran Passenger Innovations' post-COVID surge reshaped the Airbus widebody IFE landscape, while the seat market continued its gradual diversification. Chinese-manufactured seats consolidated their domestic foothold, lightweight innovators such as Expliseat, gained blue-chip customers, and premium economy continued its steady march toward global ubiquity, with new regions and flagship airlines finally committing to the product.

This report draws on CAPA - Centre for Aviation's Aircraft Interiors Database and News coverage to map how 2025 quietly - but fundamentally - reset the trajectory of the interiors market.

US airlines felt positive about the year ahead in Jan-2025, with some executives predicting record financial performances for the year.

Fast forward to Jan-2026 and the year is bookended by airlines being forced to revise their first and fourth quarter financial forecasts, after the the US government introduced sweeping tariffs and forced airlines to cut flights as the busy holiday season approached.

After a whirlwind year in which they had to quickly make adjustments to their expectations, US airlines feel reasonably positive about 2026.

Additionally, Frontier and Spirit could possibly be close to finally announcing a merger after numerous attempts for a combination that could stabilise the ultra low cost model in the US.

The first week of January marks the start of the new year. The start of the year has also witnessed a number of historic 'firsts' in aviation.

As long ago as 3-Jan-1496, for example, Leonardo da Vinci tested a flying machine. It failed.

More successful was the world's first commercial airline service, launched on 1-Jan-1914.

The first week of January has considerable significance for aviation companies, ranging from Avro Aircraft to Lufthansa and LOT Polish.

It has also marked milestones in the lives of a number of aviation trailblazers from the early decades of powered flight and the introduction of the first airline uniforms.

Over the past year, CAPA - Centre for Aviation has delivered successful events across the globe.

From Grand Cayman to Lisbon, via Athens, Cairns, Lima and Singapore, it was amazing to welcome so many delegates and share and discuss latest industry insights.

At each of the events CAPA's analysts have taken the opportunity to interview many leading officials.

Here's some of the most popular CAPA TV video interviews from 2025.