DALLAS — Delta Air Lines (DL) and Aeromexico (AM) have strongly criticized the US government’s termination of their 2016 joint venture, calling the decision “arbitrary, misdirected, discriminatory, and ineffectual” in a filing to the US Department of Transportation (DOT).

The airlines warn that canceling their alliance would result in the loss of jobs, higher fares, and the elimination of US$800 million in consumer benefits. DL had previously asked the DOT to reconsider its tentative decision, and in the new filing, the airlines provided more detailed arguments for why the decision should be reversed.

Specifically, the carriers describe the DOT’s process as “rash, counter-productive, discriminatory, and unprecedented” and criticize the decision as “ill-conceived and deficient.” The airlines also highlight the risk of route cancellations and aircraft downsizing, further eroding economic benefits for communities on both sides of the border.

The carriers also argue that the termination of the joint venture harms consumers, erodes competition in the US-Mexico market, and slows economic growth without any countervailing benefit to U.S. aviation interests or likely impacts the actions of the Mexican government. They further argue that the partnership has substantial consumer and competitive benefits, including lower fares, a higher-quality network, and new and expanded service.

Delta Air Lines at Fort Lauderdale- Hollywood International Airport. Photo: Helwing Villamizar/Airways
Delta Air Lines at Fort Lauderdale- Hollywood International Airport. Photo: Helwing Villamizar/Airways

Why the U.S. Canceled the Delta-Aeromexico Partnership

At the start of the year, the U.S. government announced that it did not intend to extend the antitrust immunity granted to the airlines for their codeshare agreement, effectively ending the joint business by the end of the summer travel season. The decision came after the Mexican government made significant changes at Mexico City International Airport (MEX), the country’s central hub.

Mexican President Andres Manuel López Obrador decided to ban cargo jets at MEX in February 2023 to relieve congestion at the airport. This policy change has substantially affected the cargo industry’s operations and logistics. Under the president’s orders, Mexican officials would relocate cargo flights from MEX to the newly built Felipe Angeles International Airport (NLU). Furthermore, the availability of slots for commercial flights at MEX was reduced to alleviate congestion at MEX.

According to the U.S. Department of Transportation (DOT), these actions negatively impact existing carriers and potential new entrants. We can recall that at the start of October 2023, the DL and AM unveiled plans to enhance their partnership by introducing 17 new routes from various airports in Mexico to nine destinations in the United States.

The news of the DL-AM attempted rebuttal of the DOT ruling comes as the Mexican flag carrier and Tampa International Airport (TPA) announce a daily nonstop service from Tampa to Mexico City on July 1, 2024.

Featured image: Delta Air Lines and Aeromexico aircraft seen from the Seattle–Tacoma International Airport roof. Photo: Brandon Farris/Airways

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Article source: https://airwaysmag.com/delta-aeromexico-contest-partnership-termination/

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