Mexico’s antitrust commission Federal Economic Competition Commission (COFECE) has approved the agreement between North American and Mexican ultra-low-cost carriers Allegiant Air and VIVA Aerobus for a transborder commercial alliance.

The agreement, announced in December last year, is aimed at expanding low-fare service between Mexico and the US.

It is said to be the first of its kind partnership in the industry.

Viva Aerobus CEO Juan Carlos Zuazua said: “COFECE’s authorisation is one step forward to forging an alliance that will strengthen a competitive environment with a larger offering between Mexico and the US.

“Working as a team, we will boost air travel and tourism while reaping the economic benefits associated with the travel industry.”

In addition, Allegiant will make a strategic equity investment in the Mexican carrier.

The alliance will facilitate cross-functionality between the two budget airlines, which includes code sharing, sales systems and route networks to operate flights together.

It will also see the duo focus on serving destinations that presently do not provide nonstop service.

COFECE’s nod will help Allegiant foray into and expand its presence in the Mexican market and enable Viva to further boost its footprint in various US markets.

Allegiant CEO John Redmond said: “This approval is a critical next step to achieving a historic and unique alliance between two low-cost carriers in the world’s most dynamic airline market.

“Together, we will make it possible for more people to fly and enjoy the unique culture, traditions, and scenic destinations both countries have to offer.”

The agreement is currently subject to the clearance of the US Department of Transportation (DOT ).