Advertisement

US Weighs Halting Delta-Aeromexico JV Amid Mexico Concerns

(Bloomberg) -- US regulators tentatively denied the review of a joint venture between Delta Air Lines Inc. and Grupo Aeromexico SAB because of a dispute over Mexico’s aviation rules.

Most Read from Bloomberg

The US is worried about how recent actions by officials are impacting US carriers at Mexico City’s Benito Juarez International Airport, according to a Department of Transportation document filed on Friday and obtained by Bloomberg News. Authorities are calling for the agreement to wind down by Oct. 26.

Aeromexico said it’s reviewing the decision and will “in a timely manner submit arguments enabling the authority to make a final determination.” Delta also said it was looking into the ruling.

The rift is unfolding as President Andres Manuel Lopez Obrador aims to boost traffic to Felipe Angeles International Airport, a flagship project that opened in March 2022 to relieve traffic at Benito Juarez. So far, the new airport — located about 50 kilometers (31 miles) north of Mexico City’s center — hasn’t made a big impact. At the behest of the president, domestic airlines have slowly been adding flights.

The document pointed to a government decision that prohibited cargo operations at Benito Juarez airport due to saturation levels, without making any plans to add operational capacity. It also references a ruling from August that blocked a similar deal between low-cost carriers Allegiant Travel Co. and Mexican airline Grupo Viva Aerobus SA.

The document is a preliminary decision and allows for 14 calendar days in which the parties involved may submit evidence and objections to prevent the ruling from becoming final.

Aeromexico and Delta representatives did not immediately reply to comment requests sent after business hours.

The companies have been seeking to coordinate routes and pricing since 2016.

(Updates with responses from Aeromexico and Delta in the third paragraph)

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.