DOT tentatively approves Delta, Aeromexico venture for Mexico

Delta Air Lines will be able to jointly market and provide flights with Aeromexico between the U.S. and Mexico, under the Transportation Department’s tentative approval Friday.

The airlines already combine to carry about one in four passengers between the two countries. The approval would allow them to jointly carry more passengers than either American Airlines or United Airlines, which each carry more than one in five travelers between the countries.
 
In exchange for the approval, the department required Delta and Aeromexico to surrender government permits for 24 pairs of takeoffs and landings at Mexico City’s airport and six pairs of slots at New York’s John F. Kennedy airport. The goal was to prevent the airlines from dominating those congested and popular airports because they would have controlled half the slots at Mexico City.
 
“This remedy would allow for new, competitive entry at these airports that would not otherwise be possible,” Jenny Rosenberg, acting assistant secretary of Transportation for international affairs, wrote in a 36-page announcement.
 
The airlines had applied for the joint venture in March 2015, requesting anti-trust immunity in order to optimize schedules, enhance their offerings and potential expand services.
 
A consumer group, Travelers United, opposed the proposal for further consolidating air travel and potentially leading to higher fares.
 
JetBlue Airways and Southwest Airlines each argued that low-cost carriers should be provided slots at Mexico City and JFK because of the difficulty for competitors to enter those congested markets.
 
JetBlue urged the surrender of 30 slots at Mexico City and four at JFK. Southwest urged a surrender of 21 peak-hour slots at Mexico City and argued that the slots should be given to U.S. rather than Mexican airlines.
 
Nearly 26.6 million people flew between the U.S. and Mexico during the year that ended June 30. Of those, Aeromexico carried nearly 3.6 million and Delta carried nearly 3.2 million.
 
The combination of those offerings would eclipse American’s nearly 6 million or United’s nearly 5.4 million passengers.
 
The department is asking for public comment about the tentative approval for 14 days, and replies for another week after that.
 

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