DOT Grants Antitrust Immunity to Delta-Aeromexico
Decision is subject to conditions that will protect competition and consumers
WASHINGTON – The U.S. Department of Transportation (DOT) issued today a Final Order granting approval of, and antitrust immunity for, the proposed alliance agreements submitted by Delta Air Lines and Aeromexico. Delta and Aeromexico have proposed to use the antitrust immunity to operate a joint venture between the U.S. and Mexico and will coordinate their network planning, pricing, and sales activities, as well as enhance the alignment of their respective frequent flyer program.
The Department determined that the proposed alliance, as conditioned, has the potential to provide substantial benefits for the traveling public, including broader connectivity between the United States and Mexico.
The Department identified a number of competitive issues that could prevent the public from realizing those benefits, if left unchecked, and developed conditions to ensure that approval of the alliance is pro-consumer. Among those conditions, is the requirement that the carriers divest takeoff and landing authorizations (“slots”) to support 24 new daily transborder services from Mexico City and four new daily transborder services from New York JFK to be operated by competing airlines. The Department found these conditions necessary to prevent harm to consumers that would result from the carriers’ dominant positions at MEX and JFK and the inability of new entrant carriers to access slots at the airports. The slot divestitures would occur over the spring and fall of 2017. The Department also finalized other conditions on its approval, including limiting the grant of immunity to five years.
Delta and Aeromexico have seven business days to accept or reject the conditions.
The Final Order, as well as all pleadings in the case, can be accessed at regulations.gov, Docket DOT-OST-2015-0070.