Mexico’s domestic market remains stable as the four largest airlines sustain their market share

Mexico's domestic aviation market appears to be undergoing a slow and steady recovery, reflected in healthy passenger growth of roughly 12% for 1H2015. Economic indicators are generally trending in the right direction, although conditions still remain choppy.

Low-cost airline Volaris has a reasonably positive view of the domestic market, and is opting to increase its capacity on some routes in 2H2015. Its yields are continuing on a positive trajectory as Mexico's largest airline Aeromexico posted a decline in yield and unit revenues for 1H2015. But Aeromexico has inherent strategic benefits, including a leading position at Mexico City Juarez International Airport, and a deep partnership with Delta Air Lines for added connectivity within the domestic market, and on US transborder routes.

Domestic market share allocation among Mexico's largest airlines remained fairly stable year-on-year for 1H2015, with no major jumps by a single airline. Much untapped demand remains in the market place, but it remains to be seen if four major airlines are required to absorb that demand.