The U.S. Department of Transportation has ordered Delta and Aeromexico to end their antitrust-immune joint venture by Jan. 1.
The move means that the two carriers must stop jointly scheduling and pricing U.S.-Mexico flights. The DOT said the airlines can maintain less integrated partnerships such as codesharing and reciprocal loyalty program benefits.
Delta can also continue to hold its 20% share of Aeromexico, and the two airlines will be able to continue their existing flying between the U.S. and Mexico.
"Antitrust immunity for joint-venture agreements is an extraordinary authority -- not a right -- that the U.S. DOT only supports when foreign countries abide by the basic principles of fairness, free markets and competition," the DOT said.
The order is a response by the U.S. to restrictive policies the government of Mexico implemented in 2022 and 2023, when former president Andres Manuel Lopez Obrador sought to boost flight activity at the new Felipe Angeles Airport outside of Mexico City, which was a pet project of his.
Over the course of those two years, the Mexican government placed capacity restrictions on Mexico City's Benito Juarez International Airport, reducing hourly flight operations from 61 to 43.
Mexico also terminated cargo service at Benito Suarez in 2023, forcing all Mexico City cargo service to be moved to Felipe Angeles.
The DOT has determined that the capacity reductions at Benito Juarez violate the Open Skies air transport agreement between the U.S. and Mexico.
Adherence to that agreement is a necessary condition for any partnership between a U.S. and Mexican airline to receive antitrust immunity.
The DOT first proposed revoking the Delta-Aeromexico joint venture in January 2024. But the Biden administration took no further action.
The matter was brought back this July under the Trump administration, with DOT Secretary Sean Duffy issuing a tentative order that the joint venture be dissolved by Oct. 25.
The final order gives the airlines an additional two-plus months to end their joint venture due to the practical challenges of winding it down and to prevent disruptions during the holiday season.
In a statement, Delta said all of its Mexico flights will continue as normal unless customers are otherwise contacted by the airline.
"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," Delta said. "We are reviewing the department's order and considering next steps."
Aeromexico stated that the DOT's decision "overlooks the benefits that the alliance has brought to connectivity, tourism and consumers in Mexico."
In arguments registered in the public docket over the past 20 months, the airlines have contended that their partnership is pro-competitive, generating 4,000 jobs and $300 million in U.S. GDP. They've said that dissolving the joint venture would jeopardize two dozen routes and could force the airlines to fly existing routes with smaller planes.
In its final order, the DOT said the government of Mexico has begun engaging the U.S. about its concerns about Open Skies violations. However, those discussions will take time.
With Delta and Aeromexico accounting for nearly 60% of U.S.-Mexico market share at Benito Juarez, the flight reductions Mexico imposed there "create unacceptable actual and potential harm for stakeholders and consumers," the order reads. "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."