RDU’s new flight to Mexico City may be canceled over dispute between US and Mexico
Aeromexico’s daily nonstop flights between Raleigh-Durham International Airport and Mexico City set to begin this summer were made possible by a partnership with Delta Air Lines, the two companies say.
But now a decision by the U.S. Department of Transportation to rescind a key pillar of that partnership has put the flight and 22 others in the U.S. at risk, the airlines say. Aeromexico and Delta are selling tickets on the RDU flight that starts July 1 but say they may have to end the service in the fall if the USDOT doesn’t change its position.
The USDOT tentatively denied Delta and Aeromexico’s request to continue providing immunity from U.S. antitrust laws. Without that immunity, the airlines would need to end their joint venture that has allowed Aeromexico and Delta to combine their networks.
“This includes the ability to share revenue, coordinate on route planning and scheduling and to line up the two airlines essentially as one airline for the benefit of the consumer,” Delta spokesman Drake Castaneda wrote in an email.
The cost savings created by the Joint Cooperation Agreement or JCA make flights like the one at RDU possible, the airlines say.
More than 125,000 passengers flew from North Carolina to Mexico last year, according to Patrick Hannah, a member of the RDU Airport Authority board. Aeromexico and Delta hope the convenience of a nonstop flight to Aeromexico’s hub in Mexico City will attract new travelers as well.
“Whether for business or leisure, all who wish to travel from North Carolina to Mexico — and vice versa — will be adversely affected should the federal transportation department move forward with terminating the JCA,” Hannah wrote in an op-ed piece in The News & Observer. “The loss of these routes will reduce service and market competition, which could in turn force travelers to pay higher airfare.”
The USDOT has not made a final decision
The USDOT approved the Aeromexico-Delta partnership and granted the antitrust immunity in 2016, in part to provide competition for United and American, which dominated the U.S.-Mexico market from their hubs in Texas.
The government said its approval was based on several conditions, including that the government of Mexico take steps to reform what the U.S. considered an “opaque and anticompetitive” system for allocating slots for airlines at Mexico City’s Benito Juárez International Airport.
Instead, according to USDOT, the Mexican government has cut the number of slots at the airport and moved all cargo traffic to an outlying airport, moves the U.S. says undermine healthy air service between the two countries. With Mexico essentially out of compliance with an aviation agreement with the U.S., the USDOT says it can’t approve antitrust immunity for Aeromexico and Delta.
The decision, released in late January, is preliminary. USDOT gave the airlines and other parties a chance to object but said they should be prepared to “unwind” elements of their joint venture by late October.
Delta and Aeomexico made their case in a 105-page filing in late February. They said their operating agreement has no bearing on Mexican government policy and that ending it would not bring about the changes the USDOT seeks. The main result, they say, would be fewer flights and less competition.
“Nearly two dozen routes between the United States and Mexico would be at risk of cancellation, and capacity would be reduced,” they wrote. “Without network benefits, fares on JCA routes would certainly increase, and $800 million in annual consumer benefits would evaporate.”
A spokesman for Aeromexico declined to comment this week. The U.S. Department of Transportation did not respond to request for comment or to say when it would make a final decision about the Aeromexico-Delta partnership.
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