Mexico’s airlines remain cautious about a domestic rebound while expanding internationally

Cautious optimism remains the underlying theme in the Mexican domestic market as conditions, while improving, remain fragile. After battling depressed yields for a good portion of 2014, Mexico's two publicly traded airlines Aeromexico and Volaris are posting gains in yield growth, albeit from a fairly low base.

The improving conditions in Mexico's domestic market are reflected in 12% passenger growth for the first four months of 2015 to a respectable 11 million, with each of the country's largest airlines maintaining their respective market share year-on-year.

International passenger growth among Mexican airlines jumped 18% during the first four months of the year as Aeromexico and Volaris in particular direct the bulk of their planned 2015 capacity growth to international markets to offset some of the pricing weakness that remains in Mexico's domestic market.