The US government is threatening broad restrictions on Mexican carriers operating within the USA, and specifically says it plans to reverse approval of the joint venture (JV) deal between Delta Air Lines and Aeromexico.
The US Department of Transportation (DOT) revealed planned actions on 19 July in response to what it describes as violations of the US-Mexico air transport agreement and anti-competitive behaviour that favours Mexican airlines.
The Trump administration’s actions include tentatively reversing Delta and Aeromexico’s JV, a partnership which has been active for about eight years. The DOT notes that the Delta-Aeromexico JV was set to expire in 2020 but has been extended, pending review.
“We decide tentatively to disapprove the JV and withdraw the grant of [antitrust immunity] currently in effect following a wind-down period,” says an order signed by Transportation Secretary Sean Duffy.
“Based on our review, the conditions required for an immunised JV do not exist and the immunised JV no longer serves the public interest due, in large part, to anti-competitive measures imposed by the government of Mexico that are distorting the marketplace,” the DOT says.
”Because the department is committed to restoring a level playing field for all market participants as soon as possible, the new application will remain suspended pending full resolution of the critically anticompetitive and distortive market conditions in the US-Mexico market,” it says.
Delta decries the flurry of actions, asserting that the DOT’s tentative proposal to terminate its partnership with Aeromexico ”would cause significant harm to consumers travelling between the US and Mexico, as well as US jobs, communities and transborder competition”.
Delta holds a 20% ownership stake in Aeromexico, estimated at a carrying value of $376 million, according to Delta’s most recent 10-Q filing with the US Securities and Exchange Commission.
In response to the DOT’s allegations, Delta and Aeromexico on 21 July filed a request for a four-week extension to “fully address the issues” raised by the department’s 40-page order.
”The department made a number of observations and assertions… that warrant specific and detailed responses,” the airlines say.
Delta and Aeromexico say in the filing that they intend to conduct a poll of the carriers that stand to be affected by the DOT’s actions and “advise the department of the results”.
Delta tells FlightGlobal that it is ”reviewing the series of DOT orders regarding Mexico’s adherence to the US-Mexico air transport agreement and looks forward to working with the Trump Administration to resolve the issues raised in the orders”.
SLOTS SCRUTINISED
Regarding the DOT’s more broadly focused actions, the department alleges that Mexico has failed since 2022 to comply with the air transport agreement, ”when it abruptly rescinded slots and then forced US all-cargo carriers to relocate operations”.
“By restricting slots and mandating that all-cargo operations move out of [Benito Juarez International airport], Mexico has broken its promise, disrupted the market and left American businesses holding the bag for millions in increased costs.”
Starting in May 2022, the Mexican government required some airlines to operate at the new Felipe Angeles International airport, which is farther from Mexico City than the primary hub, Benito Juarez.
It also rescinded availability of slots at Benito Juarez that had been used by both US and Mexican passenger airlines.
”Mexico has walked away from its commitments,” the DOT says, adding that the country ”lacks a transparent and non-discriminatory slot allocation regime that adheres to international standards and applies consistently across the country’s airports”.
The DOT’s order says the “prospect of arbitrary action” has raised concerns regarding the “long-term competitiveness of the US-Mexico market”.
IATA is urging ”direct dialogue” to resolve the dispute.
“The US-Mexican aviation market is one of the largest between neighbouring countries in the world and a key driver for both economies,” says Peter Cerda, IATA’s regional vice-president for the Americas.
”We are hopeful that both sides will engage in direct dialogue to seek balanced and constructive solutions for all involved.”
Seeming to acknowledge inconsistency in Mexico’s approach to slot allocation, IATA acknowledges that it has been “liaising with the Mexican authorities for numerous years” to advocate for ”globally accepted World Airport Slot Guidelines”.
“This work remains a priority given that many airports in the country, especially Mexico City International airport, continue to face capacity constraints,” IATA says.
Aviation activities between the two countries contributes an estimated $83 billion to Mexico’s economy, IATA says, accounting for nearly 5% of the country’s gross domestic product.
In response, the DOT is now requiring that by 29 July Mexican airlines file with the agency a list of their schedules for flights to the USA.
Additionally, starting in 30 days the DOT will prohibit Mexican airlines from operating “any charter flights using large aircraft to or from the” USA unless the DOT has approved those flights.
Under the new restrictions, Mexican carriers must file with the DOT for those approvals – called statements of authorisation – at least 30 days prior to operating the flights.
“The department reserves the right to disapprove flight requests from Mexico should the country fail to take corrective action,” the DOT says.
