Delta Air Lines is in talks with regulators in hopes of securing a “less-punitive” ruling after the US Department of Transportation’s (DOT) tentative order that it end its joint venture with SkyTeam partner Aeromexico.
In a preliminary decision at the end of January, the DOT cited concerns about how Mexican government actions are impacting US airlines at Mexico City’s Benito Juarez International airport in ordering the two carriers to unwind their joint venture by October.
”That was a tentative view and our view is the DOT really struck out on that one,” said Delta executive vice-president Peter Carter during a first-quarter earnings call on 10 April.
”They are typically a great partner, but this… was an example of regulatory overreach, which is why we have challenged it. It’s bad for consumers. It’s bad for competition. It’s bad for the local economies those flights served.”
He adds: ”We are currently engaged with the administration and discussing less-punitive solutions than the tentative order that was proposed. And we’ve had hundreds of… allies, with respect to the connection between Mexico and America, wade in, in support of this joint venture.”
Last month, Delta submitted some 60 letters from various supporters – including businesses, trade groups, lawmakers and governors – in opposition to the DOT ruling.
”We think this is going to take some time before the DOT issues a final order, a number of months,” Carter says. ”But we are cautiously optimistic that they are going to come up with a better solution.”
Delta and Aeromexico have been operating a joint venture on cross-border routes since 2016. The DOT ruling comes as Mexico has been throttling down traffic movements at Benito Juarez airport, Mexico City’s busiest, in favour of the newer but more-distant Felipe Angeles International airport.
Low-cost carriers Allegiant Air and VivaAerobus, who earlier saw consideration a similar pact suspended for the same reason, have also urged the DOT to review a decision regarding their application.
