Aeromexico and Mexicana Consider Merger

The combination could produce Latin America’s biggest carrier

The Mexican government is floating a proposal to merge the country’s two major airlines, Aeromexico and Mexicana, as part of a plan to sell a stake in the combined company to investors by next year, airline officials confirmed.

Aeromexico and Mexicana were placed under the control of Cintra, the state holding company that owns both airlines, in 1995 when they faced financial difficulty in the wake of Mexico’s 1994 financial crisis. In October 2000, the Federal Competition Commission recommended the breakup of Cintra, saying competition would lower the price of air transportation in Mexico and boost tourism.

Aeromexico and Mexicana control nearly 80 percent of the Mexican domestic air market. If combined, the resulting entity would be Latin America’s biggest carrier. Mexico’s Federal Competition Committee, the country’s antitrust agency, must approve the proposal.