Introduction
The US Department of Transportation’s (DOT) decision not to renew the antitrust immunity for the Delta-Aeroméxico alliance may signal future US grievances against Mexico regarding its aviation and competition policies, according to Javier Núñez, a partner at Ockham Economic Consulting.
Background on the Delta-Aeroméxico Alliance
Since 2016, the antitrust immunity granted to Delta-Aeroméxico has allowed both airlines to operate as a single entity in the transborder market. This privilege enables them to share revenues and costs, plan routes, frequencies, capacities, and tariffs together. However, this immunity is set to expire on January 1, 2026.
DOT’s Concerns
The DOT accuses the Mexican government of violating the 2014 Mexico-US Air Agreement through three determinations:
- Reducing the number of takeoff and landing operations per hour at Mexico City International Airport (AICM) from 62 to 51 and then to 43, effectively “confiscating” slots from various airlines, including US ones.
- Implementing a slot allocation system deemed “lacking transparency” by the DOT.
- Prohibiting dedicated air cargo operations at AICM in 2023, relocating them to the Felipe Ángeles International Airport (AIFA), further from Mexico City.
These measures, according to the DOT, disadvantaged other US airlines compared to Delta-Aeroméxico.
Impact on Competition
Javier Núñez explains that these actions distort the market, giving an unfair advantage to Delta-Aeroméxico. For instance, when AICM operations were reduced, Aeroméxico could cancel unprofitable domestic routes to focus on more lucrative transborder flights, while US airlines couldn’t do the same due to their limited international operations.
The DOT argues that in a distorted market, the antitrust immunity for Delta-Aeroméxico not only loses its purpose but also exacerbates the harm to competition.
Unresolved AICM Saturation
Núñez emphasizes that the underlying issue remains the unresolved congestion at AICM, which hinders growth for everyone except at others’ expense.
Message Ahead of T-MEC
Beyond this, the DOT’s decision might reflect only the first US claim against Mexican policies threatening competition in the aviation sector. Núñez cites the recently amended Federal Economic Competition Law, which allows state-owned companies to be exempt from antitrust regulations, disadvantaging their competitors.
The timing of the DOT’s resolution is significant, as the US government has requested Mexico to eliminate non-tariff barriers as a condition for not increasing tariffs on Mexican products outside the T-MEC to pressure against the fentanyl issue.
The impending T-MEC review adds to the tension, with Núñez noting that the US is setting rules before negotiations and outlining potential pressure tactics using these claims.
Key Questions and Answers
- What is the DOT’s decision regarding Delta-Aeroméxico antitrust immunity? The DOT decided not to renew the antitrust immunity for Delta-Aeroméxico, which expires on January 1, 2026.
- Why is the DOT taking this action? The DOT accuses the Mexican government of violating the 2014 Mexico-US Air Agreement through three determinations, which distort the market and give an unfair advantage to Delta-Aeroméxico.
- What are the potential implications for US-Mexico aviation relations? This decision may signal further US grievances against Mexico regarding aviation and competition policies, potentially impacting the T-MEC negotiations.
