Possible Aeromexico-Mexicana merger faces less resistance

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Mexico's Government believes there are grounds to reconsider a merger between the country's two principal airlines, Aeromexico and Mexicana, given the changed economic conditions since the first, pre-privatisation attempt at consolidation.

The Mexican federal competition commission COFECO blocked the earlier attempt to bring the two airlines together.

But a Mexican transport ministry source says that this ruling took place before the emergence of several low-cost carriers in the country, adding: "They now hold a market share of more than a third of the domestic traffic, so there would be no longer the risk of creating a monopoly."

The civil aviation directorate's chief, Gilberto Lopez Meyer, has publicly stated that mergers are a desirable step, and the source claims that movement in this direction is likely to occur after the summer peak season.

Mexicana and Aeromexico, along with Volaris and Interjet, are emerging as the country's main players following the ministry's 'zero tolerance' campaign over the last few weeks against airlines which have accumulated large air traffic control debts. The ministry has acted against Avolar, Aviacsa, Nova and Aerocalifornia.

In a market as large as Mexico, says the source, the number of strong carriers "should not drop below three" in order to ensure adequate competition.