The Trump administration has ordered Delta Air Lines and Aeromexico to dissolve their nine-year-old joint venture on grounds of unfair competitive advantage, effective from January 1, 2026.
US DOT orders JV dissolution effective from Jan 1, 2026
The United States Department of Transport passed a final order on September 15, mandating Delta Air Lines to dismantle its “price- and capacity-setting” joint cooperative agreement with Aeromexico due to unfair competetive advantage.
The administration stated that the Mexican government is restricting competition at the primary airport of Mexico City, and the joint venture gives the two airlines an unfair competitive advantage. The joint venture was approved nine years ago, in 2016. In July this year, the administration had passed a show-cause order proposing that the two airlines end the agreement given the anticompetitive effects in the U.S.-Mexico City markets.
The termination would be effective from January 1, 2026. The DOT, in its ruling, detailing its reasons for the order, said:
“This action is necessary because of ongoing anticompetitive effects in U.S.-Mexico City markets that provide an unfair advantage to Delta and Aeromexico as two predominant competitors and create unacceptable actual and potential harm for stakeholders, including consumers.”
“These anticompetitive effects have broader implications beyond Mexico City, affecting competition for passengers and cargo operations in additional markets between the United States and Mexico.”
The transportation department said that Mexico has failed to cooperate with the bilateral agreement by rescinding slots at Benito Juárez International Airport (MEX). The Mexican government has justified its decision, stating that it has passed the new rules to avoid congestion at the primary airport of Mexico City. The department further accused Mexico of disrupting the market.
Delta and Aeromexico are considering further options
Delta Air Lines, in a statement, said that it was reviewing the DOT’s order and was disappointed with the decision. It said:
“We are disappointed that the Department of Transportation has chosen to terminate its approval of the strategic and pro-competitive partnership between Delta and Aeromexico, a decision that will cause significant harm to U.S. jobs, communities and consumers traveling between the U.S. and Mexico. We are reviewing the Department’s order and considering next steps.”
It further added that flights will continue to function as per usual , unless otherwise contacted by Delta. The airline still holds a 20% stake in Aeromexico. The department has said that it can pursue other “alternative paths” to gain similar benefits from its investments while the two airlines work together in different ways. In a press release, the DOT said:
“Delta and Aeromexico will be able to continue their partnership through arms-length activities such as codesharing, marketing, and frequent flyer cooperation. Delta will also be able to retain its equity stake in Aeromexico and both carriers can maintain all of its existing flying in the U.S.-Mexico market unimpeded.”
Both airlines are reviewing the mandate in order to decide how to move forward.
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