The Trump administration has ordered Delta Air Lines and Aeromexico to dissolve their joint venture by January 1. The joint venture, which has been in place for nearly nine years, allows the carriers to coordinate scheduling, pricing, and capacity decisions for US-Mexico flights. According to the US Transportation Department, the move is necessary due to ongoing anticompetitive effects in US-Mexico City markets that provide an unfair advantage to Delta and Aeromexico.
The carriers currently account for approximately 60% of passenger flights from Mexico City Airport to the US. Mexico City Airport is the fourth-largest international gateway to and from the United States. The US Transportation Department had proposed ending the joint venture in July as part of a series of actions aimed at Mexican aviation. This decision follows concerns over limitations at airports and the potential for higher fares, reduced capacity, and challenges for US carriers due to government intervention.
Delta has expressed disappointment over the decision, stating that it will cause significant harm to US jobs, communities, and consumers traveling between the US and Mexico. The airline claims that the joint venture generates nearly 4,000 US jobs and over $310 million of US gross domestic product. Meanwhile, Aeromexico has regretted the decision, citing the benefits the alliance has brought to tourism and connectivity.
Despite the dissolution of the joint venture, the codeshare agreement between the airlines will remain in effect, as will the reciprocity of their frequent flyer programs. However, Delta has warned that up to $800 million in annual consumer benefits could be lost, and two dozen routes could be canceled. The US Transportation Department has also warned that Mexico’s market intervention and distortion of competition in the US-Mexico air services market could have further consequences.
The decision is part of a broader effort by the US government to address concerns over aviation trade practices. In July, the US Transportation Department took action against Mexico after the country cut flight slots and forced cargo carriers to relocate operations in Mexico City, impacting US airlines. The department has also warned European countries over limitations at airports, highlighting the need for fair competition in the aviation industry. The dissolution of the Delta-Aeromexico joint venture marks a significant development in US-Mexico aviation relations, with potential implications for consumers, airlines, and the broader industry.
