US appeals court allows Delta-Aeroméxico joint venture to continue 

A US appeals court has overturned a Department of Transportation order that would have forced Delta Air Lines and Aeroméxico to dismantle their joint venture covering flights between the United States and Mexico.

The 11th US Circuit Court of Appeals vacated the September 2025 order on August 20, 2026, finding that the DOT failed to adequately explain why it used a narrower competition analysis than it had applied in previous airline-alliance cases. 

The ruling allows Delta and Aeroméxico to continue coordinating schedules, fares and capacity under the antitrust immunity granted to their partnership in 2016. 

The airlines never dismantled the joint venture. The appeals court stayed the DOT order in November 2025, preventing it from taking effect while the court considered the carriers’ legal challenge. 

In its ruling, the court said the department “did not reasonably explain why it conducted a far more limited market analysis in this case than it has always done in the past.” 

When the DOT originally approved the partnership, it examined competition across the entire US-Mexico market and 1,687 individual city pairs. Its 2025 review instead focused primarily on conditions at Mexico City International Airport (MEX), which accounts for about 21% of flights between the two countries. 

The court said the department’s final order did not include updated airline market shares, analyze how those shares could change if the partnership continued or conduct a new assessment of individual city-pair markets. 

“Accordingly, the final order was arbitrary and capricious because DOT drastically departed from its uniform practice of analyzing country-pairs and city-pairs without a reasonable explanation of why such analyses were not necessary in this case,” the court said. 

The judges also questioned why the DOT imposed an open-skies requirement on Delta and Aeroméxico that it had not applied to similar US-Japan airline partnerships. 

The department had argued that policies adopted by the Mexican government distorted competition and breached the 2015 US-Mexico Air Transport Agreement. 

US officials objected to reductions in available slots at Mexico City International Airport and the government’s decision to move cargo operations from MEX to Felipe Ángeles International Airport (NLU). The DOT said those policies favored Mexican carriers and restricted access for US airlines. 

That dispute prompted the department to withdraw approval and antitrust immunity from the Delta-Aeroméxico joint venture in September 2025. The airlines were initially ordered to end their cooperation by January 1, 2026. 

Antitrust immunity allows Delta and Aeroméxico to coordinate commercially sensitive decisions that would otherwise be prohibited, including prices, schedules and capacity. The airlines can also share revenue from flights covered by the agreement. 

The arrangement goes significantly further than a conventional codeshare, under which one airline can sell seats on another carrier’s flights without jointly setting fares or determining how much capacity to offer. 

Delta and Aeroméxico formed the joint venture after receiving approval from US and Mexican regulators in 2016. It began operating in 2017 and has become a central part of both airlines’ networks between the two countries. 

Delta also owns approximately 20% of Aeroméxico. 

Both carriers welcomed the ruling. Aeroméxico said the joint venture and its antitrust immunity remain in effect, allowing the airlines to continue offering their coordinated network and services. 

The decision does not settle whether the partnership benefits or harms competition. The court ruled that the DOT had not adequately supported its decision, rather than determining that the joint venture is necessarily pro-competitive. 

The DOT could attempt to terminate the arrangement again after conducting a broader market analysis and addressing the inconsistencies identified by the court. The DOT said it was reviewing the ruling and considering its legal options. The post US appeals court allows Delta-Aeroméxico joint venture to continue  appeared first on AeroTime.

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