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Aeromexico - Strategic Analysis and Outlook Report (2026)
AviationOutlook
December 22, 2025 • Estimated Reading Time: 12 minutes
Aeromexico is Mexico’s flag carrier. It stands at a significant crossroads heading into 2026.
The airline’s recent performance demonstrates resilience despite market headwinds, while ambitious growth plans signal confidence in the years ahead.
Table of Contents
Aeromexico’s third quarter 2025 results revealed a company maintaining profitability while managing multiple operational challenges.
The airline reported total revenue of $1.4 billion, representing a 4.4% decrease compared to the same period in 2024. However, when excluding extraordinary items from 2024 related to Boeing 737 MAX compensation and expired ticket revenue, total revenue remained stable year-over-year.
Despite the revenue dip, Aeromexico achieved an adjusted EBITDAR margin of 31.0%, marking the second-highest third-quarter EBITDAR in the company’s history. Operating income totaled $252.8 million with a margin of 17.7%, while net income reached $96.9 million, translating to a 6.8% margin.
Q3 2025 FINANCIAL SNAPSHOT
Total Revenue: $1.4 billion (-4.4% YoY)
Adjusted EBITDAR: $441.6 million (31.0% margin)
Operating Income: $252.8 million (17.7% margin)
Net Income: $96.9 million (6.8% margin)
Cash & Equivalents: $934.1 million
Total Liquidity: $1.1 billion
The airline’s liquidity position remains solid, with cash and cash equivalents of $934.1 million as of September 30, 2025. Including a $200 million revolving credit facility, total liquidity reached $1.1 billion, representing a 21.2% ratio to last twelve-month revenues.
The company’s leverage, measured as adjusted net debt to EBITDAR, stood at a manageable 1.9x.
Market Conditions and Operational Challenges
The third quarter 2025 performance was influenced by several external factors. Economic weakness in Mexico, with the Global Economic Activity Indicator decreasing 1.2% year-over-year in July 2025, affected travel demand.
Economic and political uncertainty particularly impacted domestic border routes and the Mexico-U.S. transborder Visiting Friends and Relatives segment.
KEY OPERATIONAL METRICS | Q3 2025 | Q3 2024 | Change |
|---|---|---|---|
Available Seat Miles (millions) | 9,277 | 9,344 | -0.7% |
Passengers (thousands) | 6,362 | 6,703 | -5.1% |
Load Factor | 88.3% | 88.9% | -0.7 p.p. |
On-Time Performance | 91.5% | 88.1% | +3.4 p.p. |
Total Cost per ASM | 12.7¢ | 12.3¢ | +3.2% |
Capacity measured in available seat miles decreased 0.7% year-over-year in Q3 2025, with international ASMs increasing 4.2% while domestic ASMs fell 11.3%.
The airline transported 6.4 million passengers, a 5.1% decline compared to Q3 2024, with international traffic growing 2.9% while domestic passengers decreased 9.0%.
Fleet Modernization and Expansion Strategy
Aeromexico’s fleet strategy centers on modernization and expansion, particularly with Boeing 737 MAX aircraft.
During Q3 2025, the company received two Boeing 737 MAX-8 and two Boeing 737 MAX-9 aircraft, bringing the operating fleet to 162 aircraft as of September 30, 2025, with an average age of 8.5 years.
FLEET COMPOSITION (Q3 2025)
Aeromexico Mainline:
- Boeing 737-800: 34 aircraft
- Boeing 737 MAX-8: 44 aircraft
- Boeing 737 MAX-9: 28 aircraft
- Boeing 787 Dreamliner: 22 aircraft
Subtotal: 128 aircraft
Aeromexico Connect:
- Embraer E-190: 34 aircraft
Total Operating Fleet: 162 aircraft
Average Age: 8.5 years
The airline plans significant fleet growth in preparation for the 2026 FIFA World Cup, which Mexico will co-host with the United States and Canada.
Aeromexico announced it would add 29 aircraft in 2025 to boost connectivity for the tournament. The carrier operates the largest Boeing 737 MAX fleet in Latin America, with 67 aircraft, ranking sixth globally.
Image source: aeromexico.com
Network Expansion and Route Development
Aeromexico is pursuing an aggressive international expansion strategy, particularly focused on European markets. The airline announced new routes to Barcelona and Paris starting in 2026. From March 28, 2026, Aeromexico will operate six weekly flights between Mexico City and Barcelona, while a new route from Monterrey to Paris will launch in April 2026.
MAJOR ROUTE ADDITIONS (2026) | From | To | Frequency | Start Date |
|---|---|---|---|---|
Mexico City | Barcelona | 6x weekly | March 28, 2026 | |
Monterrey | Paris | TBD | April 2026 |
On the North American front, Aeromexico launched new routes to Philadelphia and Atlanta beginning June 5, 2025. The carrier also introduced service between Mexico City and San Juan, Puerto Rico, starting October 29, 2025.
For 2026, Aeromexico plans to boost capacity on U.S. routes from Mexico City International Airport by deploying larger aircraft, addressing constraints on adding new flights due to infrastructure limitations.
Operational Excellence and Industry Recognition
One of Aeromexico’s most significant achievements in 2025 has been its operational performance. The airline has consistently been recognized as the world’s most punctual airline, maintaining this distinction through October 2025 with an impressive on-time performance rate of 91.76%.
According to aviation analytics firm Cirium, Aeromexico achieved an on-time departure performance of 91.5% in Q3 2025, a 3.4 percentage point improvement over the same period in 2024. The airline also received the Five Star Global Airline APEX Award for the seventh consecutive year, underscoring its commitment to service quality.
Capital Markets Milestone: NYSE Listing
A watershed moment for Aeromexico came on November 6, 2025, when the airline began trading on the New York Stock Exchange following a successful dual listing IPO in the United States and Mexico. The offering, which raised $275 million with shares priced at $19 per ADS, valued the company at approximately $2.8 billion.
This marks a significant achievement for Aeromexico, occurring just four years after the airline emerged from Chapter 11 bankruptcy reorganization. The NYSE listing provides the company with access to deeper capital markets and enhanced liquidity for future growth initiatives.
Strategic Transition: End of Delta Joint Venture
A major strategic development affecting Aeromexico’s 2026 outlook is the mandated dissolution of its joint venture with Delta Air Lines. On September 16, 2025, the U.S. Department of Transportation ordered the termination of the nearly decade-old partnership, effective January 1, 2026.
The DOT cited ongoing anticompetitive effects in U.S.-Mexico City markets, particularly following the Mexican government’s slot reallocations that distorted competition. Under the joint venture, the airlines had coordinated schedules, pricing, and capacity for flights between Mexico and the United States. Delta retains its 20% equity stake in Aeromexico, but the carriers must cease coordinating prices, capacity, and revenue sharing.
This transition presents both challenges and opportunities. While the end of coordination may result in reduced synergies and potentially higher costs in some markets, it also allows Aeromexico greater operational independence and flexibility in its strategic decision-making.
Cost Management and Efficiency Initiatives
Cost pressures remain a key focus area for Aeromexico.
In Q3 2025, cost per available seat mile excluding fuel (CASM-Ex) increased 6.1% to 9.5 cents, driven by several factors: higher ownership costs from fleet additions, increased labor costs following the renegotiation of collective bargaining agreements in 2024, expansion of international operations, Mexican peso appreciation, and general inflationary pressures.
COST COMPONENTS | Q3 2025 | Q3 2024 | Change |
|---|---|---|---|
Fuel | $298M | $314M | -5.3% |
Wages, Salaries & Benefits | $299M | $268M | +11.7% |
Maintenance | $64M | $68M | -5.9% |
Aircraft Services | $166M | $157M | +6.2% |
Depreciation & Amortization | $184M | $165M | +11.8% |
Positively, fuel costs declined 5.3% year-over-year, with fuel cost per liter decreasing 3.7% from 68 cents in Q3 2024 to 66 cents in Q3 2025. Total operating expenses reached $1.2 billion, a modest 1.2% increase compared to Q3 2024.
2026 Outlook and Strategic Priorities
For the fourth quarter of 2025, Aeromexico projects modest revenue growth of 1-3% year-over-year when normalized for extraordinary 2024 items, with an adjusted EBITDAR margin of 27.5-29.0% and an operating income margin of 14.0-15.5%.
For full-year 2025, the company guides for total capacity growth of 0.2-0.5%, total revenue decline of 4.5-5.5% (or down 2.0-3.0% when normalized), adjusted EBITDAR margin of 29.0-30.0%, and operating income margin of 15.0-16.0%.
STRATEGIC PRIORITIES FOR 2026
1. Capacity Growth: Resume 4-6% annual expansion
2. Fleet Modernization: Continue Boeing 737 MAX deliveries
3. Network Optimization: Deploy larger aircraft on U.S. routes
4. European Expansion: Launch Barcelona and Paris routes
5. FIFA World Cup Preparation: Enhance connectivity for tournament
6. Independent Operations: Navigate post-Delta JV environment
7. Cost Efficiency: Maintain competitive unit costs
8. Operational Excellence: Sustain punctuality leadership
CEO Andres Conesa stated that the company’s strategy for 2026 and beyond “remains centered on driving profitable and sustainable growth,” with continued focus on operational excellence and best-in-class profitability. The airline plans to resume capacity growth of 4-6% in 2026 after a period of constrained expansion due to administrative hurdles.
Competitive Environment and Industry Dynamics
Aeromexico operates in an increasingly competitive Mexican aviation market. The pending merger between Viva Aerobus and Volaris, Mexico’s two largest low-cost carriers, could reshape the competitive dynamics, though the deal requires regulatory approval and faces potential opposition from Aeromexico.
The airline’s focus on service quality, operational reliability, and network breadth positions it as Mexico’s premium carrier, differentiating it from ultra-low-cost competitors. The FIFA World Cup in 2026 represents a significant opportunity to showcase Mexico’s aviation capabilities on a global stage and potentially gain market share.
My Final Thoughts
Aeromexico enters 2026 from a position of operational strength despite near-term financial headwinds.
The airline has demonstrated its ability to maintain industry-leading margins and operational performance while navigating macroeconomic challenges and strategic transitions.
The NYSE listing provides enhanced access to capital for growth initiatives, while fleet modernization efforts position the company for improved efficiency and customer experience.
Key to success in 2026 and beyond will be successfully managing the transition away from the Delta joint venture, capitalizing on the FIFA World Cup opportunity, executing the European expansion strategy, and maintaining cost discipline while resuming capacity growth.
With a modernized fleet, strong operational track record, and clear strategic direction, Aeromexico appears well-positioned to strengthen its position as Mexico’s leading international carrier.
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