Delta Air Lines and Aeromexico have asked a U.S. appeals court to suspend a federal order requiring them to dismantle their long-standing partnership that allows coordination on routes, fares, and flight capacity between the United States and Mexico, according to Reuters.
In filings submitted Friday to the 11th Circuit Court of Appeals, Aeromexico warned that complying with the U.S. Department of Transportation’s (USDOT) directive would cause “substantial costs” that could not be recovered, even if the joint venture were ultimately upheld by the courts. The USDOT in September ordered the nearly decade-old collaboration to end by January 1, citing antitrust concerns and broader issues with Mexican aviation policy, per Reuters.
Delta argued that the move could result in significant financial losses and widespread flight disruptions. The carrier said its operations “will face severe disruptions” and criticized the USDOT’s decision as “textbook arbitrary and capricious” and based on “unsubstantiated, irrelevant and speculative reasoning.” The Atlanta-based airline noted it has already canceled two U.S.-Mexico flights and may have to cut additional cross-border routes next summer.
Both carriers contend that the decision unfairly singles out their partnership. Delta pointed out that other airline alliances, including those involving United Airlines and All Nippon Airways, were held to less stringent standards, according to Reuters. The USDOT, which on Friday declined a request to postpone enforcement of the order, did not provide public comment.
Aeromexico said the ruling would force it to “divert existing and hire new staff, establish a new brand presence in the U.S., [and] separate its information technology platforms for U.S. pricing and sales from Delta’s.” The USDOT previously argued that the venture gives Delta and Aeromexico an “unfair advantage” in Mexico City’s U.S. markets, leading to higher fares and reduced competition. Together, the airlines handle roughly 60% of passenger flights between Mexico City and U.S. destinations, one of the largest international travel corridors in the Americas.
The airlines counter that their combined market share of 20% on U.S.-Mexico routes is comparable to American Airlines’ 21%, showing the market remains competitive. Delta has also warned that dismantling the partnership could eliminate up to $800 million in annual consumer benefits, lead to the cancellation of two dozen routes, and force the use of smaller aircraft on others, per Reuters.
Related: Trump Administration Ends Antitrust Protection for Delta–Aeromexico Alliance
While the USDOT’s order does not require Delta to sell its 20% equity stake in Aeromexico, it insists that continued collaboration would harm competition and limit options for travelers.Delta and Aeromexico Challenge U.S. Order to End Joint Venture
Delta Air Lines and Aeromexico have asked a U.S. appeals court to suspend a federal order requiring them to dismantle their long-standing partnership that allows coordination on routes, fares, and flight capacity between the United States and Mexico, according to Reuters.
In filings submitted Friday to the 11th Circuit Court of Appeals, Aeromexico warned that complying with the U.S. Department of Transportation’s (USDOT) directive would cause “substantial costs” that could not be recovered, even if the joint venture were ultimately upheld by the courts. The USDOT in September ordered the nearly decade-old collaboration to end by January 1, citing antitrust concerns and broader issues with Mexican aviation policy, per Reuters.
Delta argued that the move could result in significant financial losses and widespread flight disruptions. The carrier said its operations “will face severe disruptions” and criticized the USDOT’s decision as “textbook arbitrary and capricious” and based on “unsubstantiated, irrelevant and speculative reasoning.” The Atlanta-based airline noted it has already canceled two U.S.-Mexico flights and may have to cut additional cross-border routes next summer.
Both carriers contend that the decision unfairly singles out their partnership. Delta pointed out that other airline alliances, including those involving United Airlines and All Nippon Airways, were held to less stringent standards, according to Reuters. The USDOT, which on Friday declined a request to postpone enforcement of the order, did not provide public comment.
Aeromexico said the ruling would force it to “divert existing and hire new staff, establish a new brand presence in the U.S., [and] separate its information technology platforms for U.S. pricing and sales from Delta’s.” The USDOT previously argued that the venture gives Delta and Aeromexico an “unfair advantage” in Mexico City’s U.S. markets, leading to higher fares and reduced competition. Together, the airlines handle roughly 60% of passenger flights between Mexico City and U.S. destinations, one of the largest international travel corridors in the Americas.
The airlines counter that their combined market share of 20% on U.S.-Mexico routes is comparable to American Airlines’ 21%, showing the market remains competitive. Delta has also warned that dismantling the partnership could eliminate up to $800 million in annual consumer benefits, lead to the cancellation of two dozen routes, and force the use of smaller aircraft on others, per Reuters.
While the USDOT’s order does not require Delta to sell its 20% equity stake in Aeromexico, it insists that continued collaboration would harm competition and limit options for travelers.
Source: Reuters
