Mexican Airlines Benefit from Stronger Peso: Monex

The appreciation of the Mexican peso against the US dollar is helping Mexican airlines offset higher fuel costs linked to the conflict in the Middle East, according to Grupo Financiero Monex. Analysts said the exchange rate, combined with ancillary revenues and expected demand growth tied to the 2026 FIFA World Cup, is reducing pressure on airline operating margins.

Roberto Solano Pérez, analysis manager, Grupo Financiero Monex, told A21 that the current exchange rate environment has softened the impact of higher jet fuel prices, as airlines pay for fuel, aircraft leases, and several maintenance expenses in US dollars. Mexican carriers generate most of their revenue in pesos, making exchange rate movements a key factor for profitability.

“There is the price of jet fuel, but there is also the exchange rate. Fortunately, the exchange rate has remained low. So if oil prices rise, which increases fuel costs, but you have an appreciated exchange rate, it helps compensate operationally,” Solano Pérez said.

According to Mexico’s Central Bank (Banxico) data, the dollar opened 2026 at MX$17.88, reached a low of MX$17.13 on Feb. 18, and a high of MX$18.10 on March 30. During the same period in 2025, the exchange rate fluctuated between MX$19.26 and MX$20.85 per dollar. On May 22, the peso closed at MX$17.32 per dollar after a 0.14% depreciation following Moody’s downgrade of Mexico’s sovereign credit rating from “Baa2” to “Baa3.”

Historically, Mexican and Latin American airlines have faced financial pressure during periods of dollar appreciation, as operating expenses are largely denominated in US currency while ticket sales are generated in local currencies. Analysts at Monex said the current peso performance has helped offset part of the cost increase caused by higher oil prices and geopolitical uncertainty involving Iran, the United States, and Israel.

Solano Pérez said Monex does not expect a prolonged period of oil prices above US$100 per barrel and considers it unlikely that crude prices could reach US$200, even if tensions in the Middle East persist. He said the impact on airlines will likely remain concentrated in quarterly operating margins rather than creating structural financial risks for the sector.

“They will be quarterly operational impacts where the only thing that happens is that margins become tighter,” Solano Pérez said. “If you look at it on an annual basis, the first quarter had no impact, the second quarter will have some impact, the third perhaps as well, but not the fourth. It will not be such a bad year.”

World Cup Expected to Boost Passenger Traffic

Monex also projects that the 2026 FIFA World Cup will support sustained passenger traffic growth across Mexico’s aviation industry. The tournament, which will take place from June 11 to July 19 across Mexico, the United States, and Canada, is expected to generate between US$1.8 billion and US$3 billion in economic impact nationwide, according to Monex estimates.

Mexico will host 13 matches in Mexico City, Guadalajara, and Monterrey as part of the tournament’s expanded 104-game format. Airport operators are expected to benefit from increased domestic and international passenger flows linked to the event.

Monex forecasts passenger traffic growth of 3.9% for Grupo Aeroportuario del Sureste, 2.3% for Grupo Aeroportuario del Pacífico, and 7.3% for Grupo Aeroportuario del Centro Norte in 2026. The financial group also projects average tourism growth of between 4% and 5% during the World Cup cycle.

Airlines are also expected to benefit from higher ancillary revenues generated through baggage fees, onboard services, and travel-related experiences. Monex forecasts passenger growth of 4.4% for Aeroméxico, 6.9% for Volaris and 6.1% for Viva during 2026, supported by stronger domestic and international demand linked to tourism, corporate travel, and event-related mobility.