According to a recently published agreement between the Trump Administration and Delta Air Lines/Aeromexico, the joint venture must end by January 1. These release follows consistent outcry over competition concerns between the United States and Mexico. On Monday the Transportation Department posted the order to file. This deal represents an important turn in the almost 10-year-long partnership between the two companies.
In 2012, Delta Air Lines and Aeromexico created a joint venture. This joint venture allows them to align schedules and price fares on flights from the U.S. into Mexico. Convenience for passengers The agreement to jointly operate that route, which started in 2016, was intended to improve passenger convenience and produce economic development. Expanded codeshare opportunities As proof of the cooperation, both airlines claim the partnership has created some $310 million in economic benefits for the U.S. economy.
Despite the order’s implications, Aeromexico has indicated that flights will continue to operate on each other’s airlines. The two carriers will continue their frequent flyer program reciprocity as well. Delta Air Lines and Aeromexico express dissatisfaction. Delta Air Lines and Aeroméxico Express are voicing their displeasure at the Department of Transportation’s ruling. They are currently considering what to do following the order.
The Biden administration recently considered withdrawing antitrust immunity from this joint venture. This decision was significant because it underscored increasing U.S. concerns over competitive practices by both countries. The latest tit-for-tat is the latest in a years-long unresolved dispute between the US and the EU over aviation relations.
The order does not affect the ability of Delta Air Lines to maintain its current 20% equity stake in Aeromexico. Despite these concerns, both airlines have been on record warning that dissolving their partnership would result in severe economic harm. They contend that if the joint venture is dissolved, competitors will likely capture the market share, which could “cause significant harm to U.S. jobs, communities and consumers traveling between the U.S. and Mexico.” – Delta