Delta Air Lines has expressed disenchantment over the US Department of Transportation’s final order to dismantle its co-operation agreement with Mexican carrier Aeromexico.
The final order, issued on 15 September, instructs the partnership to end on 1 January next year.
Delta and Aeromexico secured anti-trust immunity for their tie-up at the end of 2016, but the US government states that this was obtained through a “narrow pathway” and came with “strict conditions”.
The Department of Transportation had been concerned about such issues as the slot-allocation mechanism, and its competitive impact, at Mexico City.
When the two carriers sought to prolong the validity of their agreement in 2022, aviation relations between the USA and Mexico had soured following the US FAA’s declaration that Mexican safety oversight was not ICAO-compliant.
This declaration meant Mexican carriers’ expansion of US operations was frozen and further raised concerns over competition in the market.
Although the restriction was lifted in 2023, the Department of Transportation says the Mexican government has taken various measures to restrict the US-Mexico air services market.
The Department proposed, early last year, to cancel the Delta-Aeromexico anti-trust approval by refusing an extension. It justified the decision by claiming “confiscation” of US carrier slots by the Mexican government as well as “non-transparent” slot-administration processes.
While the Department considered alternative measures – such as adopting a wait-and-see approach, allowing time for negotiations, or carving out Mexico City from the approval – it says “circumstances have changed” since the initial grant of anti-trust immunity and “significant competition concerns exist”.
Delta and Aeromexico have strenuously objected to the proposal, arguing that their tie-up is “pro-competitive”.
Following the final order, Delta states that it is “disappointed” over the decision.
It says the termination will “cause significant harm” to US jobs, communities and consumers. “We are reviewing the Department’s order and considering next steps,” it adds.
