Delta Air Lines and Aeromexico call the US government’s planned termination of their joint venture “arbitrary, misdirected, discriminatory and ineffectual” in a new filing protesting the move.
The carriers on 23 February sent a strongly-worded complaint to the US Department of Transportation (DOT), which in January issued a tentative decision to nix the longstanding agreement. According to the DOT’s decision, the joint business is to be terminated by the end of the summer travel season, on 26 October.
“If finalised, [the decision] would punish the… partners and the communities they serve, erode competition in the transborder US-Mexico market, harm US-Mexico consumers and slow economic growth with the largest trading partner of the United States – all with no countervailing benefit to US aviation interests or likely impact on the actions of the government of Mexico,” the airlines write.
Delta in February had asked the DOT to reconsider its tentative decision. In the new filing, the airlines explain in more detail why they think the DOT should reverse course.
The decision is “ill-conceived and deficient”, Delta and Aeromexico write, describing the DOT’s process as “rash, counter-productive, discriminatory and unprecedented”.
“The [joint business] generates hundreds of millions of dollars annually in benefits for travellers in the US-Mexico market through lower fares, a higher-quality network and schedule, new and expanded service, more-convenient flight options between the two countries, and enhanced competition with other US and Mexican air carriers,” the airlines say. “Unwinding the [joint business] would eliminate those substantial consumer and competitive benefits.”
The partnership has been in effect since December 2016.
The airlines say “nearly two dozen” routes would be at risk for cancellation, with at least 10 others seeing a move to smaller aircraft – eroding economic benefits for communities on both sides of the border. Jobs will be lost and fares will rise as a result, and $800 million in consumer benefits will “evaporate”, they say.
The DOT on 26 January tentatively rejected the carriers’ request to renew their cross-border joint business due to a dispute about capacity reductions and cargo prohibitions at Mexico City’s Benito Juarez International airport. The DOT says the government of Mexico has been violating the US-Mexico air transport agreement. At the time, Delta said it was “deeply disappointed” in the DOT’s decision.
The decision struck a blow against the two carriers, which have successively built out their partnership since the US government last September lifted Mexico’s safety status back up to Category 1, the highest level, after it had been relegated to Category 2 for more than two years.
In recent months, the Mexican government has been cutting traffic at Benito Juarez airport, Mexico City’s busiest, and encouraging airlines to add flights at the newer but more distant Felipe Angeles International airport. The shift has angered operators and international airline lobby groups like IATA. Last year, the older airport could accommodate about 62 aircraft operations hourly. In early 2023, that number slipped to 52, with the explanation being that there would be some infrastructure improvements made. Those never materialised, and authorities decided to further reduce hourly operations to 43.
On 9 February, Delta asked the DOT to reconsider and suspend its ruling, and instead pursue other steps to address the air-transport treaty dispute. Those steps should include the DOT working directly with the government Mexico, under arbitration if necessary, as laid out in the US-Mexico air transport treaty itself, Delta said.
“An intergovernmental dispute between the United States and Mexico, over which the [airlines] have no control, provides no rational basis for causing substantial harm to a US carrier,” Delta said in that 9 February filing.
In July 2023, the DOT suspended consideration of an application for antitrust immunity by Allegiant Air and Viva Aerobus for the same reason.
