US legacy carriers like Delta successfully neutralized low-cost threats (Spirit, Frontier) by introducing "Basic Economy" fares. Leveraging their scale and loyalty programs, they could price-discriminate, matching LCC prices on a fraction of their seats while maintaining premium pricing on the rest, effectively starving competitors of the price-sensitive traffic they relied on.

Established industries often operate like cartels with unwritten rules, such as avoiding aggressive marketing. New entrants gain a significant edge by deliberately violating these norms, forcing incumbents to react to a game they don't want to play. This creates differentiation beyond the core product or service.

GE serves two distinct customers: powerful airframers for the initial sale and a fragmented base of hundreds of airlines for aftermarket services. This split forces new entrants to solve a '3D puzzle' of satisfying both technically demanding OEMs and a global user base simultaneously, creating an immense and durable barrier to entry.

Volaris and Viva can likely win regulatory approval for their merger by offering a political quid pro quo. By shifting capacity to the former president's underutilized, military-run Felipe Ángeles airport (AIFA), they allow the government to declare its controversial infrastructure project a success, creating a powerful non-economic incentive for approval.

Beyond low fares, Ryanair's long-term dominance stems from its financial strategy of investing when the industry is weak. The airline uses its large cash reserves to place massive, discounted aircraft orders with manufacturers like Boeing during slumps and opportunistically seizes market share when legacy carriers falter. This turns competitors' crises into major growth opportunities.

Large incumbents struggle to serve newly-formed startups because these customers offer low initial revenue but require significant sales and support. This P&L constraint creates a protected 'greenfield' market for new vendors to capture customers early and grow with them.

The primary growth driver for Mexican airlines like Volaris is not taking share from rivals, but converting travelers from the country's massive long-range bus industry. With 3 billion annual bus passengers, airlines tap a huge, underpenetrated market by offering a superior value proposition on a dollar-per-hour basis, fueling structural demand growth.

Amadeus was formed by major airlines to create a neutral distribution system. This origin story provided immediate scale, credibility, and deep industry integration, creating a powerful competitive moat from day one that would be nearly impossible for a startup to replicate.

The proposed merger combines Volaris's owner (Indigo Partners), which secures bulk discounts on Airbus orders, with Viva's owner, who also controls Mexico's largest bus conglomerate. This creates a powerful synergy: a low-cost fleet supplied by the ultimate customer acquisition funnel (the bus network), forming a unique and sustainable competitive moat.