After a 23 June hearing, judges are set to decide the fate of the Delta-Aeromexico joint venture.
Federal judges may soon rule on whether the US Department of Transportation (DOT) erred in shutting down the Delta Air Lines-Aeromexico joint venture.
Attorneys for Delta and the DOT made oral arguments to a US federal judge on 23 June, a step typically proceeding a decision, typically reached by a panel of judges.
A decision could come anytime.
During the 23 June hearing, Delta attorney Eugene Scalia argued that the JV became wrongly enwrapped in a broad US-Mexico political dispute and said the DOT erred with its 2025 decision to revoke the JV’s antitrust immunity.
“Because of a trade dispute with the Mexican government, the department has acted to scuttle a business into which two companies have invested millions, which serves hundreds of thousands of customers and employs thousands of workers,” Scalia tells US judge Robin Rosenbaum with the US Court of Appeals for the Eleventh Circuit.
“They took shortcuts to put a business out of business,” he adds.
Government attorney Steven Mintz shot back, saying the DOT has a mandate to “end approval of joint ventures that substantially reduce competition, regardless of whether there is a contributing cause”.
“The actions of the Mexican government at [Mexico City International airport], in reducing the number of slots, foreclosing new entry, banning all cargo carriers – all these things enabled the joint venture to entrench itself with roughly 60% of the slots and 70% of the cargo tonnage,” he says.
Much is at stake for Delta and Aeromexico, which are seeking to maintain a JV the DOT originally approved through a grant of antitrust immunity in 2016. That approval required the airlines divest 24 slots at Mexico City International.
MEXICO CITY RESTRICTIONS
But the DOT in 2025 declined to renew the immunity, citing the Mexican government’s 2022 decision to reduce flight caps and rescinded US airlines’ operating slots at Mexico City International – a bid to shift air traffic to the new Felipe Angeles International. Mexico also forced US cargo airlines to relocate to Felipe Angeles.
The DOT said those actions violated access provisions in the US-Mexico “open skies” agreement.
The restrictions also left Delta and Aeromexico at a competitive advantage to other US carriers, the DOT said in its 2025 order shutting down the JV.
Delta challenged the decision with the appeals court. A judge allowed the JV to continue pending the appeal. Mexico also recently agreed to rectify some of the US government’s concerns. Still, the DOT has not backed down.
During the 23 June hearing, Delta attorney Scalia noted that the DOT made its original 2016 JV approval good for only five years (it was later extended) because the government wanted the option if circumstances change to “fully” reevaluate the market.
He says the DOT completed no such study before rejecting the JV last year; it only considered the Mexico City situation, disregarding broad market changes that included a low-cost-carrier influx.
Judge Rosenbaum questions that point. “We’re now nine years later… Why wasn’t DOT obligated to do a more-comprehensive analysis before terminating a joint venture”? she asks DOT attorney Mintz.
“There was no need for the department to replicate the entire analysis,” Mintz replies, saying the DOT has shown “how competition has become worse over the nine years rather than better” at Mexico City.
Attorneys also spared over the relevancy of Mexico’s alleged violations of the open skies deal. In disapproving the JV, the DOT had called open-skies agreements “necessary” for JVs.
But Scalia notes the DOT has approved previous JVs involving airports not subject to open-skies agreements, like Tokyo Haneda airport.
The post Delta, DOT square off in court ahead of Aeromexico joint venture ruling first appeared on FlightGlobal.