Delta & Aeromexico ask court to keep their JV; say ‘highly likely’ they will win case
The DOT previously ordered Delta and Aeroméxico to dismantle their JV by January 1, 2026.
Delta Air Lines and Aeroméxico have requested the United States Court of Appeals for the Eleventh Circuit to maintain their joint venture (JV) as legal proceedings against the Department of Transportation (DOT), which they believe they are “highly likely” to win, continue.
In court filings, the two airlines asked the US Court of Appeals for the Eleventh Circuit to “stay” the DOT’s order that mandated the pair to dismantle their JV, arguing that if the court does not approve their motion, it will “require Aeroméxico and Delta to unravel a nearly nine-year-long Joint Venture in less than three months.”
“This would require Aeroméxico to, for example, divert existing and hire new staff, establish a new brand presence in the U.S., separate its information technology platforms for U.S. pricing and sales from Delta’s, and [confidential] — all over the extremely busy holiday travel season.”
Then, if the court reverses the DOT’s order to end the JV, Aeroméxico and Delta Air Lines would have to “reverse course” and re-establish the venture, which would result in the two airlines suffering “concrete, calculable harm from such an upheaval to their brand and operations.” However, the two airlines would not be able to recover any financial losses from the DOT, the filing read.
If the court were to stay – or, in layman’s terms, keep the JV going until the court reaches a final decision – the DOT’s order, it would maintain a status quo in the air market between the US and Mexico, which has been beneficial to the public “for almost a decade.”
“Further, given the multitude of defects in the [DOT’s] Order, Aeroméxico and Delta are likely to succeed on their claim that the [DOT’s] Order is arbitrary and capricious.”
Interestingly, the two carriers pointed out that while the DOT reached a conclusion that their JV is “adverse to the public interest and negatively impacts competition,” it did so by violating the Administrative Procedure Act’s (APA) requirements, failing to focus on their venture’s impact on the air travel market between the two countries.
Instead, it focused on the Mexican government’s decision regarding its actions at Mexico City International Airport (MEX), which “distorted” competition by barring US airlines from accessing and/or expanding capacity at MEX.
“But the Department fails to articulate any evidence that the Joint Venture actually causes competitive harm, and then it penalizes the Joint Venture for supposedly not performing as well as expected against its competitors.”
On September 15, the DOT published its final decision against the JV, with the Department having initiated the investigation in 2023, when it suspended the review of the then-planned Allegiant Air and Viva (then known as Viva Aerobus) JV.
The Department alleged that the Mexican Government’s decisions to “confiscate” slots, forcibly move cargo operations from MEX to Felipe Ángeles International Airport (NLU), perpetuate a “slot allocation regime that does not meet international standards and advantages Aeromexico,” and the risk that it may, at any time, take arbitrary actions that would disrupt airlines’ business plans, not only violated the open skies agreement between the US and Mexico, but also provided “an unfair advantage to Delta and Aeromexico as two predominant competitors and create unacceptable actual and potential harm for stakeholders, including consumers.”
As such, the DOT refused to renew the antitrust immunity (ATI) for the two carriers’ JV and mandated Delta Air Lines and Aeroméxico to dismantle their partnership before or on January 1, 2026.
Allegiant Air and Viva, in response to the DOT’s preliminary order to end Delta Air Lines and Aeroméxico’s JV, said that while they partially agree with the Department’s analytical framework to review the Delta/Aeroméxico partnership, the DOT would fail to find similar “alleged failings” if the Department were to analyze the proposed JV between the two low-cost carriers.
“To the contrary, the benefits of capacity expansion and new route launches that will lower fares – which DOT found lacking in the Delta/Aeromexico alliance – are the central feature of the Allegiant/Viva alliance.”
To support their claims, the two-to-be partners created a site with tables and graphs. The website’s domain is “mexicanbeaches4all.com.” Not much to add here, I just found it kind of cheeky.
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