The Department of Transportation (DOT) has ruled that Delta Air Lines and Aeromexico will not be permitted to continue their joint venture after January 2026.
In a statement, Transportation Secretary Sean Duffy said that the department is revoking the antitrust immunity it gave the two airlines in 2016 because of concerns over access by U.S. airlines to Mexico City’s airport, which he says is a violation of the “open skies” agreement between the two countries.
The Biden Administration DOT had already tentatively declined to renew the joint venture in January 2024; this final order issued by the DOT puts an official end date on the partnership.
Delta and Aeromexico, both members of the SkyTeam Alliance, have long offered reciprocal frequent flier benefits and easy transfers for passengers connecting between the two airlines. The antitrust immunity granted by the DOT allowed the two airlines to fully coordinate schedules, pricing, and share costs on flights between the United States and Mexico as though they were a single airline.
Consumers in the U.S. and Mexico could face longer connection times and fewer flight options now that the carriers are no longer able to fully cooperate, but it’s unclear whether there would be a significant increase in fares, since both carriers are returning to a competitive pricing stance.
In the joint venture, a passenger traveling between Boise, Idaho, and Mexico City could fly Delta to a hub, then board an Aeromexico flight to Mexico City. The fare would be the same regardless of whether the passenger bought the ticket from Delta or from Aeromexico.
After the joint venture ends, a passenger could still do that, but the fare could be different, depending on which carrier sells the ticket, meaning one carrier could undercut the other for the exact same flights, and they would no longer share revenue for the entire itinerary—only for the flight each carrier operates. Each carrier would likely see less revenue from the same itinerary, which could cause them to increase fares on such itineraries or make fewer itineraries available to passengers, which could also increase fares.
In a statement, Delta said consumers on both sides of the border would be impacted by the order. “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.”
The agreement between Delta and Aeromexico was the only one of its kind covering the U.S.-Mexico air market. Both American and United serve a significant number of destinations in Mexico from their U.S. hubs, but do not have significant agreements to cooperate with Mexican carriers. Delta competitor American Airlines currently serves the most cities in Mexico of any U.S. carrier.
Mexican President Claudia Sheinbaum maintains that the government’s restrictions on the airport at Mexico City, including reducing the number of slots available for airline departures and requiring cargo airlines to move to an alternate airport several hours from the city, were taken to alleviate congestion, not to disadvantage U.S. airlines.
More than 40 million Americans visited Mexico last year, making it the top destination for U.S.-originating international travelers. The U.S. and Mexico have had an Open Skies agreement governing air service between the two countries, meaning there are no limits on the air service one country’s airline can have to the other. The agreement also requires that both countries provide “fair and equal opportunity” for U.S. and Mexican airlines to compete on international routes between the U.S. and Mexico. (https://www.fodors.com/world/mexico-and-central-america/mexico/experiences/news/transportation-department-ends-delta-aeromexico-joint-venture)
