A key approval has paved the way for Aeromexico and Delta Air Lines to go forward with their proposed joint venture, but the process is not yet complete.
According to an Aeromexico investor update earlier this week, the Mexican Senate has finally delivered a long-awaited vote in favor of approving a more open bilateral aviation agreement between the US and Mexico. This updated agreement is a prerequisite for regulatory approval of the Delta-Aeromexico venture, and also an opportunity for all airlines to offer expanded service between the countries.
The long-awaited aviation agreement, the signing of which a US Department of Transportation (DOT) official confirmed on Dec. 5, 2015, would eliminate numerical limits on the number of airlines that can serve transborder city pairs. US airlines, especially low-cost carriers, have been supportive of the new agreement.
But in addition to the new bilateral going through, Mexico’s antitrust authority, Cofece (for its name in Spanish), has also needed to weigh in on Delta’s and Aeromexico’s proposed business partnership. The authority delivered its resolution on the matter earlier this week, and the two airlines’ legal teams are now digesting its terms.
In order for Cofece to authorize the Delta-Aeromexico proposed joint venture, the regulator said, the airlines must “transfer” eight slot pairs at Mexico City International Airport. The two airlines will evaluate the terms before proceeding, Aeromexico said in a statement.
Delta declined to comment on details of Cofece’s resolution, but confirmed in a statement that it is reviewing the authority’s response.
“Delta and Aeromexico are evaluating the terms, conditions and requirements established in the notification to determine a course of action,” Delta said.
Access to slot-constrained Mexico City Airport has been a point of contention for some airlines operating there in general, as well as in the context of Delta’s and Aeromexico’s proposed venture.
New York-based JetBlue Airways, while supportive of the updated bilateral agreement, has raised competition concerns about limited access at Mexico City.
In addition, JetBlue asked DOT to request more materials from Delta and Aeromexico before approving their antitrust immunity application. The two airlines applied for antitrust immunity on March 31, 2015, and that continues to hang in the balance until the new bilateral agreement is official.
“This application for antitrust immunity remains pending and is expected to be resolved later this year,” Delta’s statement said.
In a statement, Southwest Airlines VP-government affairs Jason van Eaton called the Mexican Senate’s support of the new bilateral agreement a “monumental step.”
“We have plans in the works for additional service to and from Mexico, and look forward to making those announcements soon should the agreement become fully effective,” he said.
ATW’s sister publication Aviation Daily has learned that for the new bilateral agreement to go into force, the two countries must first exchange diplomatic notes. It is unclear when this will occur.