US court saves Delta-Aeromexico immunized joint venture

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Delta Air Lines and Aeromexico fliers can breathe a sigh of relief.

A U.S. appeals court ruled on Thursday in favor of the airlines's immunized joint venture. The decision allows the pact to continue after the Department of Transportation attempted to end it beginning in 2024.

The decision from the U.S. Court of Appeals for the Eleventh Circuit rested on the DOT's focus on just the Mexico City market in its decision to terminate the joint venture rather than a broad U.S.-Mexico market analysis that was used when it first approved the Delta-Aeromexico pact in 2016.

"The joint venture and its antitrust immunity remain in effect, allowing Aeromexico and Delta to continue providing enhanced connectivity, a broader network, more convenient service options and increased competition for customers traveling between Mexico and the United States," Aeromexico said in a statement.

A Delta spokesperson added that the airline remains "focused on ensuring our customers, employees, and communities continue to benefit from this longstanding partnership."

A joint venture allows airlines to work closely together, flying essentially as one carrier in a certain market rather than competitors. While the depth of the partnerships vary, they typically include coordinated scheduling, pricing and joint sales. They often enable more flights and routes in a market than would otherwise be possible.

Delta and Aeromexico's joint venture covers the U.S.-Mexico market, the largest international market by seats from the U.S., schedule data from aviation analytics firm Cirium shows.

Since implementation a decade ago, the airlines have added dozens of new routes including from Benito Juárez International Airport (MEX) near Mexico City to Phoenix Sky Harbor International Airport (PHX) , Raleigh-Durham International Airport (RDU) and Tampa International Airport (TPA) .

Many of those new routes were considered to be in jeopardy if Delta and Aeromexico were forced to end their tie-up.

Today, Delta and Aeromexico combined flight schedule would represent the second-largest share of seats between the U.S. and Mexico. American Airlines has just over a 20% share of seats during the year end in August, which compares to just under 20% for Delta and Aeromexico's joint venture, Cirium schedules show. Mexican discounter Volaris is third with a 19% seat share.

The partnership includes reciprocal loyalty benefits for Delta SkyMiles members and Aeromexico Rewards members.

The DOT threat to terminate their joint venture was only the latest challenge for Delta and Aeromexico. The former was forced to suspend its codeshare and coordination with the latter from 2021 through 2023 when the Federal Aviation Administration downgraded Mexico's safety rating — a measure of a country's regulatory regime rather than an individual airline — to Category 2. The pact resumed when Mexico was returned to a Category 1 rating in 2023.

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