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    A Matter of Trust: An Analysis of the US-Mexico Air Dispute and the Uncertain Future of the Delta-Aeromexico Alliance

    A deep-dive analysis of the U.S.-Mexico dispute. The DOT's proposal to terminate the Delta-Aeromexico alliance reveals a policy clash and threatens to redefine aviation in the region.

    20 de julio de 2025 - 16:27
    A Matter of Trust: An Analysis of the US-Mexico Air Dispute and the Uncertain Future of the Delta-Aeromexico Alliance
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    The commercial aviation relationship between the United States and Mexico, for nearly a decade a banner of economic liberalization in North America, stands on the brink of a fracture with global repercussions. On July 19, 2025, the U.S. Department of Transportation (DOT), under new leadership, executed a bold regulatory maneuver: the formal proposal to withdraw antitrust immunity (ATI) from the alliance between Delta Air Lines and Aeromexico. This action is not a simple fine or a flight restriction; it is a direct strike at the heart of the most integrated commercial partnership in the transborder market, threatening to dismantle it entirely.

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    The move is the culmination of growing frustration in Washington over a series of actions by the Mexican government that, according to the DOT, violate both the letter and the spirit of the 2015 Air Transport Agreement. With forceful statements, Secretary of Transportation Sean P. Duffy asserted that the era of complacency is over, noting that the previous administration "deliberately allowed Mexico to break our bilateral aviation agreement. That ends today." This move transforms a dispute over airport slots into a geopolitical battlefield, with the Delta-Aeromexico alliance as the main asset at stake.

    The Broken Foundation: The Spirit of the 2015 Agreement

    To understand the severity of the U.S. response, it is crucial to grasp the philosophy of the 2015 Air Transport Agreement. This treaty was not a mere technical update; it represented a paradigm shift. Decades of protectionism, where governments limited routes and frequencies to protect their flag carriers, were abandoned in favor of an “Open Skies” system, founded on competition. The goal was to "eliminate government interference in the commercial decisions of air carriers," allowing the market, not bureaucracy, to determine prices and services.

    Article 11 of the treaty, on "Fair Competition," is the central legal clause. It explicitly prohibits one party from unilaterally limiting "the volume of traffic, frequency or regularity of service" of the other party's airlines, with very limited exceptions (customs, technical, operational, or environmental). The DOT's perspective is that Mexico's actions do not fit into any of these legitimate exceptions.

    The Mexican Strategy: Mismanagement or Industrial Policy?

    The controversy centers on two main actions by the Mexican government:

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    Capacity Reductions at AICM: Starting in 2022, operations at Mexico City International Airport (AICM) were drastically reduced, dropping from 61 to 52, and then to 43 movements per hour. The official justification was "saturation" and the need for works to ensure safety. However, the DOT calls this reason a "pretext," arguing that three years later, the promised infrastructure improvements have not materialized and that the measure was arbitrary.

    Forced Relocation of Cargo: In 2023, a presidential decree forced all dedicated air cargo operations to move from AICM to the new and more distant Felipe Ángeles International Airport (AIFA), a flagship infrastructure project of the administration. This measure, implemented on short notice, not only contravened the airlines' right to choose their point of operation but also, according to critics, represented a disguised industrial policy to ensure AIFA's viability, using regulation as a tool to direct traffic to it.

    Although the slot cuts at AICM affected all airlines, including Mexican ones, the net effect of the freighter ban disproportionately benefited the belly cargo operations of Aeromexico at AICM, the only major network carrier remaining. This fuels the U.S. view that beneath a veneer of fairness lies an anticompetitive strategy.

    What is Antitrust Immunity (ATI) and why is it vital for alliances?

    ATI is an exceptional permit from the U.S. government that allows competing airlines to collaborate in ways that would normally violate antitrust laws. Under a Joint Cooperation Agreement (JCA) with ATI, like that of Delta-Aeromexico, the companies can coordinate prices, schedules, manage capacity, and share revenue on specific routes, functioning as a single entity. This enables network efficiencies, such as better connections and more destinations, which benefit the consumer but requires an Open Skies environment to be approved.

     

    The U.S. Response: A Surgical Strike

    Facing what it perceives as deliberate non-compliance, the DOT activated its authority under the International Air Transportation Fair Competitive Practices Act (IATFCPA). Instead of a blanket flight ban, a clumsy and disruptive measure, it opted for a "surgical strike": the Supplemental Show Cause Order to withdraw ATI.

    The DOT's reasoning is both legal and philosophical: ATI is not a right, but a privilege granted on the basis that a liberalized and competitive market exists. If one of the parties (Mexico) dismantles that market, the "fundamental prerequisite" for immunity disappears. In the DOT's words, the JCA "no longer serves the public interest" because it operates in a distorted market.

    This choice maximizes pressure on the Mexican government by jeopardizing the most valuable commercial asset of its flag carrier, turning Delta and Aeromexico into the unwitting protagonists of a state-to-state dispute.

     

    The Domino Effect: What Would the Dissolution Cost?

    The dissolution of the JCA would have profound consequences. Without ATI, cooperation would be reduced to a simple codeshare, losing the ability to jointly plan the network. This breaks the economic logic that sustains many routes.

    The airlines projected a grim picture in their filings with the DOT:

    Loss of Connectivity: Between 21 and 23 nonstop routes would be canceled. This would primarily affect routes that are not sustainable for a single airline but are viable thanks to passenger feed from the combined network. For example, a flight from Atlanta to Queretaro depends on both the passengers Delta originates in the U.S. and the distribution Aeromexico can offer from Queretaro to other Mexican cities.

    Direct Economic Impact: The airlines estimate a loss of over $800 million annually in consumer benefits, stemming from higher prices and fewer options. The loss of nearly 4,000 jobs in the U.S. and 16,000 in Mexico is projected, along with a drop in tourism spending of hundreds of millions of dollars.

    Harm to Competition: Paradoxically, Delta and Aeromexico argue that their JCA is a pro-competitive force, being the only network contender capable of rivaling the combination of American Airlines and United Airlines in the transborder market. Weakening them, they claim, would consolidate the power of their rivals.

    The Geopolitical Chessboard and Paths to Resolution

    The current dispute is a clear signal of a more assertive U.S. aviation policy. The explicit "warning" to European nations about airport access indicates that this case is a precedent. Washington is demonstrating its willingness to use ATI as leverage to enforce treaties.

    This strategy is not new and has already been successfully tested in Europe. In late 2023, when the government of the Netherlands attempted to drastically reduce capacity at Amsterdam Schiphol Airport (AMS) due to noise pollution concerns, the move threatened to oust U.S. carrier JetBlue. In response, the DOT, citing violations of the U.S.-EU Open Skies agreement, threatened to take direct punitive measures against KLM Royal Dutch Airlines, the Dutch partner in the immunized transatlantic alliance with Delta Air Lines. 

    As detailed in a Reuters report, the threat of blocking KLM's access to U.S. airports was enough for the Dutch government to suspend the cuts, demonstrating that the DOT views the ATI privileges of foreign partners as a highly effective foreign policy enforcement tool.

    Then, the future is poised among three possible scenarios:

    Dismantling of the JCA: If Mexico does not concede, the DOT will finalize its order before the October deadline. This would trigger operational chaos and the predicted economic damage, forcing both airlines to completely restructure their transborder operations.

    Diplomatic Solution: The government of President Claudia Sheinbaum could make concessions. This would involve, at a minimum, reversing the capacity cuts at AICM and presenting a credible and transparent plan for slot management that complies with international standards. Such an action would give the DOT justification to withdraw its order.

    Regulatory Limbo: The airlines could pursue legal challenges to delay the order, creating a prolonged period of uncertainty that would damage consumer confidence and the industry's long-term planning.

    The outcome will not only define the future of North America's most important alliance but will also set a powerful precedent for how the rules of the game are negotiated and enforced in 21st-century global aviation.

    Temas
    • Aeroméxico
    • Delta Air Lines
    • agreement
    • US DOT
    AUTOR
    Pablo Diaz (Diazpez)
    Pablo Diaz (Diazpez)
    Desde 2017, haciendo periodismo aeronáutico. Award-Winning Journalist: Ganador de la edición 2023 de "Periodismo de Altura", otorgado por ALTA. Facts don't care about your feelings.
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