Legal Skies: U.S. Court Pauses Delta-Aeromexico Venture Wind-down

A U.S. appeals court temporarily stopped the Transportation Department's order for Delta and Aeromexico to end their joint venture. The department cited competition concerns, arguing the venture controls 60% of operations at a major international gateway. Delta claims the venture faces unequal scrutiny compared to similar ventures.

A U.S. appeals court has put a temporary halt to a Transportation Department directive forcing Delta Air Lines and Aeromexico to dismantle their nearly nine-year-old joint venture by January 1. The joint venture allows the airlines to coordinate flights between the U.S. and Mexico, controlling scheduling, pricing, and capacity.

In September, the USDOT aimed to break up the venture as part of a broader move addressing competition issues in the Mexican aviation sector. The agency argues that the venture, described as "legalized collusion," dominates nearly 60% of flights at a major international gateway, potentially leading to higher fares and reduced market competition.

Delta contends it's unfairly scrutinized compared to similar arrangements like those of United Airlines and ANA. Meanwhile, the U.S. also canceled flights by Mexican airlines from key airports. Mexican President Claudia Sheinbaum criticized the U.S. for revoking route approvals, expressing disagreement with the decision.

(With inputs from agencies.)