DOT puts conditions on proposed Delta-Aeromexico joint venture in tentative approval

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Source: Delta Air Lines

The U.S. Department of Transportation on Friday said it is tentatively granting approval of antitrust immunity for a joint venture between Delta Air Lines and Aeromexico, but plans to require that the carriers divest slots at New York’s John F. Kennedy International Airport and Mexico City.

Aeromexico is the largest airline in Mexico. In the proposed $1.5 billion joint venture, the two carriers would coordinate their flights, prices and sales for the U.S.-Mexico market, along with a frequent flier program alignment. The DOT also proposes to limit antitrust immunity for the deal to five years.

The DOT said it examined competitive conditions in the Mexico City-to-JFK market, and proposes the carriers divest slots for six new daily international flights from JFK.

It also proposes the divestiture of slots for 24 new international flights from Mexico City.

“The Department tentatively finds these conditions are necessary to prevent harm to consumers resulting from the carriers’ dominant positions at [Mexico City’s airport] and JFK, and the inability of new entrant carriers to access slots at the airports,” the DOT said.

Delta said it is reviewing the DOT’s proposal.

DOT is taking comments on its proposal through Nov. 18. After reviewing comments and replies, it would issue a final decision.

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