Federal court weighs Delta-Aeromexico joint venture dispute over US-Mexico slot restrictions

A federal appeals court heard critical arguments on June 23 regarding the future of the joint venture between Delta Air Lines and Aeromexico. This proceeding follows the US Department of Transportation's 2025 decision to revoke antitrust immunity for the JV, a move that threatens the partnership and highlights complex US-Mexico aviation regulatory tensions. The court's ruling could come imminently, determining whether the DOT acted within its authority in shutting down the partnership that originally began with approval in 2016.

The Delta-Aeromexico joint venture received antitrust immunity from the DOT nearly a decade ago, allowing the airlines to coordinate routes, pricing, and operations between the US and Mexico. Such approvals typically come with conditions intended to preserve competition. In this case, a key requirement was divesting 24 slots at Mexico City International Airport to ensure market access to competitors.

However, in 2022, the Mexican government implemented a series of measures significantly restricting US carriers' operations at Mexico City International. These included reducing flight caps and rescinding US airlines’ slots, alongside policies that forced cargo carriers to relocate operations to the newly opened Felipe Angeles International Airport. The DOT viewed these moves as violations of the bilateral US-Mexico open skies agreement and grounds to end antitrust immunity because they distorted competition.

The government’s restrictions effectively entrenched Delta and Aeromexico’s JV with around 60% control of passenger slots and 70% of cargo tonnage at the primary Mexico City hub. This advantage drew DOT scrutiny and led to its 2025 decision to revoke the JV’s immunity. The DOT argued that these slot and operational limitations hindered competition by foreclosing new entry and gave the JV an unfair edge.

Delta contested the DOT’s revocation, challenging the decision in the appeals court. Delta’s counsel, Eugene Scalia, asserted the DOT’s action was improperly influenced by the broader US-Mexico political dispute rather than grounded in a full market analysis. He emphasized the Delta-Aeromexico partnership had invested millions, served hundreds of thousands of customers, and provided thousands of jobs, contending that the DOT took improper shortcuts to dissolve a viable business.

The DOT’s attorney, Steven Mintz, rebutted that the department is mandated to terminate joint ventures that harm competition, irrespective of political factors. He highlighted the concrete effects of Mexico’s restrictions at Mexico City Airport in reducing available slots and barring cargo carriers, which allowed the JV to dominate market share undeservedly. Mintz maintained that competition declined over the nine years since the JV’s initial approval, justifying the revocation.

Judges questioned both sides on procedural and substantive grounds. Judge Robin Rosenbaum asked why the DOT had not conducted a comprehensive market analysis before revoking the JV’s immunity nearly nine years after the original approval. Mintz explained the DOT found no need to redo the full market study and demonstrated worsening competitive conditions. The court also debated the role and necessity of US-Mexico open skies agreements for joint ventures, as Delta noted precedent for approved JVs at non-open-skies airports like Tokyo Haneda.

The stakes for the Delta-Aeromexico joint venture are considerable. The partnership has provided significant connectivity between the United States and Mexico, one of the busiest international market pairs. The DOT’s revocation threatens to upend route coordination and possibly disrupt service, while raising broader questions about how national policies and bilateral agreements intersect with airline joint ventures.

The hearing follows recent progress in negotiations, with Mexico agreeing to address some US concerns related to airport slot allocations and cargo operations. Despite this, the DOT remains firm in its opposition to renewing the JV’s antitrust immunity under the current operating environment. The court’s ruling will clarify how US aviation authorities balance competitive safeguards with geopolitical and regulatory developments affecting international air services.