VivaAerobus joins Volaris and Interjet in placing large A320neo order. Can Mexico sustain all three?

Competition in Mexico's dynamic market is set to intensify as the country's smallest low-cost carrier is poised to at least triple in size over the next eight years following a landmark aircraft order with Airbus.

VivaAerobus has ordered 52 A320s, allowing for a rapid replacement of its current fleet of 19 737-300s and significant growth. VivaAerobus is currently a relatively small player in the Mexican market with only a 13% share in the domestic market and is a non-factor internationally as it has just one trans-border route.

VivaAerobus is now seeking to follow its closest competitor, Volaris, with an initial public offering which should provide the funds to support accelerated fleet and network growth. Market conditions in Mexico have improved significantly in recent years but there is a risk of a return to over-capacity and irrational competition given the fleet expansion plans at the country's four main carriers.