Trump Administration Threatens Delta-Aeromexico Alliance Over Mexico Flight Restrictions

The Trump administration has imposed new restrictions on flights from Mexico, which has put the longstanding partnership between Delta Air Lines and Aeromexico in jeopardy. The Department of Transportation (DOT) alleges that Mexico has violated a bilateral air agreement by reducing slots for passenger flights and forcing all-cargo carriers to relocate their operations. This move has led to a threat from the Trump administration to revoke the antitrust immunity that Delta Air Lines and Grupo Aeromexico have enjoyed for their pricing agreement.

Transportation Secretary Sean Duffy stated that Mexico’s actions to force airlines to move out of the main Benito Juarez International Airport to the newer Felipe Angeles International Airport more than 30 miles away violated a trade agreement between the two countries and gave domestic airlines an unfair advantage. Mexico is the top foreign destination for Americans with more than 40 million passengers flying there last year.

All Mexican passenger, cargo and charter airlines will now be required to submit their schedules to the Transportation Department and seek government approval of their flights until Duffy is satisfied with the way Mexico is treating U.S. airlines. The new restrictions require Mexican airlines to submit their flight schedules to the DOT by July 29 and obtain prior approvals for flights to the United States. This development has raised concerns about the future of the Delta-Aeromexico alliance, which has been a key component of the aviation industry in North America. The partnership has allowed the two airlines to coordinate their schedules, share revenue, and offer seamless travel experiences to passengers.

Delta and Aeromexico have been fighting the Transportation Department’s efforts to end their partnership that began in 2016 since early last year. The airlines have argued that it’s not fair to punish them for the Mexican government’s actions, and they said ending their agreement would jeopardize nearly two dozen routes and $800 million in benefits to both countries’ economies that come from tourism spending and jobs. The airlines said in a previous filing fighting the order that it believes the loss of direct flights would prompt over 140,000 American tourists and nearly 90,000 Mexican tourists not to visit the other country and hurt the economies of both countries with the loss of their spending.

The Trump administration's actions are seen as a response to Mexico's alleged violations of the bilateral air agreement. The DOT's allegations include Mexico's reduction of slots for passenger flights and the forced relocation of all-cargo carriers. These actions have disrupted the aviation industry and raised concerns about the future of cross-border partnerships. The potential revocation of antitrust immunity for Delta Air Lines and Grupo Aeromexico could have significant implications for the aviation industry. Antitrust immunity allows airlines to coordinate their operations and offer joint services without the risk of antitrust lawsuits. The loss of this immunity could force the two airlines to compete against each other, potentially leading to higher prices and reduced service for passengers.

The Trump administration's actions have also raised concerns about the broader implications for U.S.-Mexico trade relations. The two countries have a long history of cooperation in the aviation industry, and the disruption of this partnership could have ripple effects on other sectors of the economy. The potential escalation of trade tensions between the two countries could further disrupt cross-border aviation partnerships and other industries. The situation remains fluid, and it is unclear how the Delta-Aeromexico alliance will be affected in the long term. However, the Trump administration's actions have sent a clear message that it is willing to take aggressive steps to enforce its interpretation of the bilateral air agreement. The aviation industry will be closely watching the developments in this case and the potential impact on other cross-border partnerships.