Volaris and Viva propose creating one of the largest low cost groups

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Subject to approval, Volaris and Viva They announce the creation of a new Mexican Airlines Group to accelerate the growth of aviation and connectivity in Mexico.

Flight Controller Aviation Company, S.A.B. of C.V.. (NYSE: VLRS and BMV: VOLAR) ("Volaris" or "the Company") and Viva Aerobus Group, S.A. of C.V.. («Viva») announced today that they have reached an agreement to form a Mexican airline group ("the airline group") under a holding company structure, with the goal of increasing low-priced air travel and connectivity in Mexico and abroad.

The two airlines will maintain their current operations under their independent operating certificates and differentiated brands, preserving existing route options for passengers, while further expanding point-to-point travel options.

Volaris and Viva seek to join

This transaction is expected to generate significant benefits for collaborators., the passengers, society in general, suppliers and shareholders of both Volaris and Viva. Simultáneamente el nuevo grupo impulsara la inversión, employment, la conectividad aérea, The tourism, y el desarrollo económico de todo México.

Con mayores economías de escala a través de este nuevo grupo de aerolíneas, Volaris y Viva se beneficiarán de menores costos de propiedad de la flota, mejor acceso a capital y una posición financiera más sólida. Esto permitirá a ambas aerolíneas expandir su oferta de servicios de bajo costo y alta calidad, haciendo que los viajes aéreos sean más accesibles para un grupo más amplio de pasajeros, with the aim of expanding market reach and stimulating demand.

«Estimamos que la formación del nuevo grupo de aerolíneas nos permitirá impulsar el crecimiento de la aviación en México, en línea con el modelo de precios bajos y vuelos de punto a punto que ha revolucionado a nuestra industria en las últimas dos décadas», said Enrique Beltranena, president and CEO of Volaris. «Las economías de escala y la expansión de la capacidad de distribución nos permitirán competir aún más eficazmente en los mercados nacionales e internacionales al reducir los costos de propiedad de la flota. A) Yes, podremos ofrecer vuelos de bajo costo a aún más pasajeros mientras buscamos un crecimiento sostenible, aprovechamos una flota más eficiente y reducimos los costos”.

«La intención es que esta transacción permita tanto a Viva como a Volaris ofrecer tarifas bajas y más vuelos punto a punto, a aún más ciudades en todo México y el extranjero, benefiting not only passengers, but also to local economies and communities.", said Juan Carlos Zuazua, Viva CEO. «Both airlines, who share a similar DNA and low-cost mentality, have always believed in the importance of making travel possible for everyone. Our passengers choose Viva and Volaris for their direct point-to-point flights, Reliable customer service and low prices, so maintaining our ultra-low cost strategy is essential not only to sustain growth, but also to deepen the loyalty of our passengers. Together, "We will continue to offer more low-cost flights for our passengers.".

Expected benefits

For the Mexican Aviation Industry

• Makes the ultra-low-cost model available to more passengers. Mexico's aviation sector can be redefined as a catalyst for national prosperity and continue to drive the democratization of aviation.
• Generate economies of scale to achieve a more solid base for growth. Recent supply chain setbacks and issues with equipment and engine manufacturers have had disproportionate impacts on the operating costs of ultra-low-cost and smaller scale airlines.. As part of the airline group, Volaris and Viva will realize economies of scale to ensure sustainable growth, fleet optimization and cost reduction in fleet ownership.
• Preserve and strengthen two recognized Mexican brands. Allows both Volaris and Viva to be more resilient and competitive organizations, able to thrive in new regional markets while maintaining their ultra-low-cost DNA to stimulate demand.

For Our Passengers

• Maintains existing options for passengers. Both Volaris and Viva will maintain their current operations under independent air operator certificates and their respective concession titles., preserving existing route offerings for passengers, as they expand their distribution capabilities and explore collaborating on benefits such as their frequent flyer programs: Doters y Altitude.
• Create new domestic travel options and expand access. The formation of the airline group will expand access to low-cost air travel and provide passengers with more convenient alternatives through more point-to-point travel solutions, with new operational bases in cities and improved connectivity through potential codeshare agreements between both airlines.
• Improve international connectivity. Volaris and Viva will expand their reach and continue to offer low rates and high quality standards in their services to communities abroad, and tourists, who visit Mexico, as well as providing passengers with greater choice through global code-sharing partnerships and distribution systems.

For Our Collaborators

• Improves job stability for Volaris and Viva employees. Both Volaris and Viva will maintain their operator certificates and the daily work of collaborators will continue as normal, protecting sources of employment..
• Create new local jobs. For each new aircraft put into service, They are typically created between 55 and 60 direct jobs, and an estimated four times more indirect jobs are generated in adjacent sectors while the new operational bases open potential relocation opportunities for current collaborators and new job offers for future collaborators..
• Generates new opportunities and professional development for Volaris and Viva employees. The new airline group will be well positioned to invest in its fleet, technology, infrastructure, training centers, maintenance and tool centers, which would result in the growth of high-paying employment opportunities.

For Our Communities

• Transform economies throughout Mexico. Volaris and Viva will be able to considerably increase operations in the metropolitan area of ​​Mexico City, including at Felipe Ángeles International Airport, as well as open new operational bases nationwide, promoting regional development and connectivity by replicating what has been achieved in current operational bases such as Monterrey, Guadalajara, Cancún, metropolitan area of ​​Mexico City and Tijuana.
• Support other related industries. Tourism and travel to visit friends and family and business trips will benefit significantly from this new group of airlines, strengthening hospitality sectors, retail and tourism, which are engines of national growth.
• Improve connectivity and expand access. El modelo de vuelos de bajo costo del nuevo grupo de aerolíneas jugará un papel importante en la conectividad de comunidades en América Latina, EU, and canada, expandiendo el alcance en mercados dinámicos.

For Our Shareholders

• Reduce los costos de propiedad de aeronaves a través de perfil financiero más sólido. El nuevo grupo de aerolíneas espera tener tendrá costos unitarios optimizados con bajo apalancamiento y mejor acceso a capital de menor costo.
• Provides better opportunities for growth. Con menores costos de flota tanto Viva como Volaris continuarán buscando un crecimiento sostenible siempre impulsado por la demanda de los clientes.
• Create significant value for shareholders. Volaris and Viva operate with a high degree of fleet compatibility, airport infrastructure, technology, reservation systems, proveedores y capacidades técnicas, generating substantial potential for synergies.

Detalles de la Transacción

Volaris y Viva han celebrado un convenio para crear un nuevo grupo mexicano de aerolíneas. Bajo los términos del convenio, Viva and Volaris shareholders will combine their holding companies through a merger of equals. At closing, Viva shareholders will receive newly issued shares of the controlling company of Volaris and Volaris shareholders will keep their shares, and each shareholder group will own the 50% of the Mexican airline group on a fully diluted basis.

The Boards of Directors of Volaris and Viva unanimously approved the transaction, which is subject to regulatory approvals, customary closing conditions and approval by the shareholders of Volaris and Viva. The transaction is expected to be completed in 2026. The shares of the holding company will continue to be publicly traded on the Mexican stock exchanges. (BMV) and new york (NYSE).

Leadership and Governance

Both Volaris and Viva will continue to operate as separate entities, with their current leadership structures. At closing, The holding company will be supervised by a Board of Directors composed of members of Volaris and Viva. The new air group will be chaired by Roberto Alcántara Rojas, current president of the board of Viva.

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