The Delta & Aeromexico joint venture is due to be dissolved because Mexico has allegedly not been complying with the 2015 U.S.-Mexico Air Transport Agreement
The US government has ordered Delta & Aeromexico to dissolve their joint venture (JV) following its ongoing disagreement with Mexico over the 2015 U.S.-Mexico Air Transport Agreement.
According to the U.S. Department of Transportation (DOT), the dissolvement of the JV has been ordered due to Mexico’s non-compliance with the Agreement.
The country's behaviour is anti-competitive and disadvantages US carriers, and means Delta and Aeromexico have an unfair advantage, said the US DOT in a press release. The government has also withdrawn antitrust immunity.
"Mexico’s non-compliance intervenes in the market to provide an unfair advantage to Delta and Aeromexico, who operated a price- and capacity-setting joint venture with conditional approval by USDOT," said the US DOT.
The US government placed restrictions on Mexico's air cargo and passenger operations in July, in response to what it said was "abuse" of the Agreement, but it said Mexico has since failed to take "meaningful action".
The Delta-Aeromexico JV must wind down by 1 January 2026, said the US DOT. Delta/Aeromexico will be required to discontinue competitively sensitive activities such as common pricing, capacity management, and revenue sharing that require antitrust immunity.
However, Delta and Aeromexico will be able to continue their partnership through arms-length activities such as codesharing, marketing, and frequent flyer cooperation.
Delta will also be able to retain its equity stake in Aeromexico and "both carriers can maintain all of its existing flying in the U.S.-Mexico market unimpeded".
Delta said: "We are disappointed that the Department of Transportation has chosen to terminate its approval of the strategic and pro-competitive partnership between Delta and Aeromexico, a decision that will cause significant harm to U.S. jobs, communities and consumers traveling between the U.S. and Mexico. We are reviewing the Department’s order and considering next steps.”
According to the U.S DOT, Mexico has not been in compliance with the agreement since carriers were required to shiift cargo operations from Benito Juarez International Airport, known as Mexico City International Airport (MEX) to Felipe Angeles International Airport (AFIA), as reported by Air Cargo News in February 2023.
