Aeromexico Challenges US Order to Unwind Delta Partnership

Aeromexico has appealed to the 11th Circuit Court to pause a U.S. order to end its joint venture with Delta by January. This action follows USDOT's move due to competition concerns. Aeromexico argues the order could lead to irreparable financial harm and disruption of its U.S. operations.

Aeromexico is challenging a decision by the U.S. Department of Transportation to dismantle its joint venture with Delta Air Lines, which has enabled coordinated flight operations, pricing, and capacity management between the two airlines. The Mexican airline filed an appeal with the 11th Circuit Court of Appeals on Friday, seeking to pause the order set to take effect by January 1.

The U.S. order, citing competitive concerns, mandates ending the nearly decade-old partnership. Aeromexico expressed that compliance would entail significant financial loss and operational disruption, including rebranding efforts and separation of their integrated pricing and sales systems within the U.S.

The joint venture, initiated to optimize the U.S.-Mexico flight market, accounts for about 60% of flights from Mexico City to America. Despite not requiring Delta to divest its stake, USDOT warns that continued collaboration could drive higher fares and reduced capacity, impacting competition adversely. Meanwhile, Delta cautions that ending the venture could eliminate considerable consumer benefits and affect multiple flight routes.

(With inputs from agencies.)