Delta and Aeromexico Joint Venture Dissolved by US Government, Route Impact Expected

The U.S. Department of Transportation has ordered Delta Air Lines and Aeromexico to terminate their joint venture by January 1, 2026. This decision follows a lengthy dispute over alleged anticompetitive practices by the Mexican government at Mexico City International Airport, which favored Aeromexico. The ruling is expected to significantly impact numerous routes connecting the United States and Mexico.

Key Takeaways

• Delta and Aeromexico’s joint venture must end by January 1, 2026.
• The U.S. Department of Transportation cited anticompetitive tactics by the Mexican government at Mexico City International Airport.
• Dozens of routes between the U.S. and Mexico City may be affected.

The DOT’s Decision

The U.S. Department of Transportation (DOT) announced its decision to end the joint venture, which has allowed Delta and Aeromexico to coordinate fares and flight schedules for nearly a decade. The DOT stated that the competitive landscape in Mexico City has worsened, not improved, in recent months. This ruling comes after a 20-month review and a previous decision by the Biden administration not to renew the antitrust immunity that underpinned the partnership.

Impact on Routes and Consumers

Delta and Aeromexico had warned that unwinding their joint venture would lead to the cessation of dozens of routes. This expansion of cross-border flying has been substantial, with Aeromexico seeing a nearly 33% increase in total seats to and from the U.S. in the current year compared to 2019. Delta was also on track for a 17% growth in seats to Mexico. Delta expressed disappointment, stating the ruling would cause "significant harm to U.S. jobs, communities and consumers traveling between the U.S. and Mexico."

Background of the Dispute

The core of the dispute lies in the DOT’s assertion that the Mexican government has engaged in anticompetitive behavior at Mexico City’s Benito Juarez International Airport (MEX). These alleged tactics include restricting access for other airlines in favor of Aeromexico, Mexico’s flag carrier. The airlines had contested the DOT’s initial findings, arguing their joint venture benefited consumers and improved connectivity.

Future of the Partnership

While the deep ties of the joint venture must be severed, it is possible that some level of cooperation could continue between Delta and Aeromexico under their existing SkyTeam alliance partnership. However, the airlines have previously indicated that the dissolution of their more integrated partnership could result in the discontinuation of certain routes.

Sources

• Delta and Aeromexico’s joint venture ordered to end by Jan. 1, The Points Guy.