Bad News for Travelers Headed to Mexico

The End of a Strategic Partnership

The Department of Transportation (DOT) has made a significant decision that will impact air travel between the United States and Mexico. Delta Air Lines and Aeromexico will no longer be allowed to continue their joint venture after January 2026. This ruling comes as a result of concerns over access for U.S. airlines to Mexico City's airport, which is seen as a violation of the "open skies" agreement between the two countries.

Transportation Secretary Sean Duffy stated that the department is revoking the antitrust immunity it granted to the two airlines in 2016. This immunity had allowed Delta and Aeromexico to coordinate schedules, pricing, and costs on flights between the U.S. and Mexico as if they were a single airline. The Biden Administration had already tentatively declined to renew the joint venture in January 2024, and this final order now officially ends the partnership.

Impact on Passengers and Airlines

Delta and Aeromexico, both members of the SkyTeam Alliance, have long offered reciprocal frequent flier benefits and seamless transfers for passengers connecting between the two airlines. With the end of the joint venture, consumers in the U.S. and Mexico may face longer connection times and fewer flight options. However, it remains unclear whether there will be a significant increase in fares, as both carriers are returning to a competitive pricing stance.

Under the joint venture, passengers traveling between cities like Boise, Idaho, and Mexico City could fly Delta to a hub and then board an Aeromexico flight to Mexico City. The fare would remain the same regardless of whether the ticket was purchased from Delta or Aeromexico. After the joint venture ends, passengers can still make such connections, but the fare might differ depending on which carrier sells the ticket. This could lead to one carrier undercutting the other for the exact same flights, with each carrier only sharing revenue for the flight they operate.

Industry Reactions and Market Dynamics

Delta expressed disappointment with the DOT's decision, stating that it will cause significant harm to U.S. jobs, communities, and consumers traveling between the U.S. and Mexico. The agreement between Delta and Aeromexico was unique in covering the U.S.-Mexico air market. While American and United serve many destinations in Mexico from their U.S. hubs, they do not have significant agreements to cooperate with Mexican carriers. American Airlines currently serves the most cities in Mexico of any U.S. carrier.

Mexican President Claudia Sheinbaum defended the government’s restrictions on Mexico City’s airport, including reducing the number of slots available for departures and requiring cargo airlines to move to an alternate airport. She stated these measures were taken to alleviate congestion, not to disadvantage U.S. airlines.

Broader Implications

Last year, more than 40 million Americans visited Mexico, making it the top destination for U.S.-originating international travelers. The U.S. and Mexico have an Open Skies agreement that governs air service between the two countries, allowing no limits on air service between them. The agreement also requires that both countries provide "fair and equal opportunity" for U.S. and Mexican airlines to compete on international routes.

As the joint venture comes to an end, the future of air travel between the U.S. and Mexico remains uncertain. Passengers may see changes in flight options, pricing, and connectivity. For airlines, the loss of coordination could mean increased competition and potential shifts in market strategies. The broader implications of this decision will likely be felt across the industry, affecting both travelers and the airlines themselves.