Aeromexico and Volaris hold a positive view for 2016 as Mexico's economy holds up better than most

Mexico's two publicly traded airlines Aeromexico and Volaris have reasonably positive outlooks for 2016 after the country's economy remained stable in 2015, compared with some of the more volatile regions in Latin America. Currency pressure remains a challenge for all of Mexico's airlines, as the MXP fell 20.7% against the USD during 4Q2015. But lower fuel costs helped Aeromexico and Volaris grow their top line profits for the full year 2015.

Although much will depend on how the overall global economic environment fares, Mexico's GDP is forecast to grow 2.8% in 2016, which should bode well for the country's airlines. Both Aeromexico and Volaris stress that their planned capacity growth for 2016 is reasonable in the circumstances. Volaris is aiming to expand at levels similar to 2015, while Aeromexico plans a reduction in its capacity growth as it matures several new international markets introduced in 2015.

Aeromexico believes that the lower capacity growth should help the airline improve its yields, which fell year-on-year in 2015. Its rival Volaris shored up its yields in 2015, and, for now, has concluded that the overall Mexican domestic and US transborder environment remains stable.