The U.S. government has ordered Delta Air Lines and Mexico’s flagship airline Aeroméxico to end their nearly decade-old joint venture by Jan. 1.
The strategic partnership — an antitrust immunity deal — allows the two airlines to coordinate schedules and prices for flights between the U.S. and Mexico.
According to the order issued by the U.S. Department of Transportation (DOT), the decision is based on “ongoing anticompetitive effects in U.S.-Mexico City markets that provide an unfair advantage to Delta and Aeromexico,” while also creating “unacceptable actual and potential harm for stakeholders, including consumers.”
The order requires Delta/Aeroméxico to “discontinue competitively sensitive activities such as common pricing, capacity management and revenue sharing.” However, the carriers will be permitted to continue their partnership through codesharing, marketing and frequent flyer cooperation and Delta will be able to retain its 20% equity stake in Aeroméxico.
A DOT press release declared that Mexico’s “refusal to follow [a] bilateral aviation agreement … requires immediate corrective action.” In July, DOT imposed restrictions on Mexican airlines in its first response to the perceived violations.
The Sept. 15 statement asserts that Mexico has not been in compliance since 2022 when it rescinded airport slots assigned to U.S. carriers at Mexico City’s Benito Juarez International Airport.
DOT claims that U.S. cargo airlines were forced to relocate operations under the pretense of a construction project to alleviate congestion that has yet to materialize. The disruption has left U.S. businesses “holding the bag for millions in increased costs,” it said.
“Empty promises mean nothing,” said U.S. Transportation Secretary Sean P. Duffy. “After years of taking advantage of the U.S. and our carriers, we need to see definitive action by Mexico that levels the playing field and restores fairness.”
Aeroméxico said it regretted the decision, insisting that it ignores the benefits the alliance had brought to tourism and connectivity.
The Mexican carrier issued a statement saying that the order “does not affect our customers,” adding that the two airlines will continue to offer flights on each other’s airline. Frequent flyer program reciprocity, in which customers can earn and burn miles, will also continue.
Delta lamented the decision in a statement of its own.
“We are disappointed that [DOT] has chosen to terminate its approval of the strategic and pro-competitive partnership between Delta and Aeromexico, a decision that will cause significant harm to U.S. jobs, communities and consumers traveling between the U.S. and Mexico.”
With reports from Reuters, La Jornada, CNBC and USA Today
