It’s no shocker that the US government is tightening its grip on Mexico, especially in today’s “America First” climate. While this approach might seem straightforward, it risks penalizing the wrong parties if applied too rigidly. This is evident as the US moves to revoke antitrust immunity for the Aeromexico and Delta partnership, casting doubt on the future of the Allegiant/Viva joint venture. However, there’s a twist: the current US administration often uses hefty penalties as bargaining chips, rarely following through. If this trend continues, these threats might just be bluster. But let’s assume the US is serious this time.
The ongoing US-Mexico tussle is something I’ve delved into before. At its core, the conflict revolves around two main issues: Mexico’s unilateral decision to shift cargo airlines from Mexico City’s primary MEX airport to the newly constructed AIFA airport, and the removal of slots at MEX due to construction that never materialized, with no signs of their return. The US argues that these actions breach the Open Skies agreement, which is crucial for allowing joint ventures with antitrust immunity between airlines from both countries. This is why there are no joint ventures with Chinese airlines. The only existing joint venture is between Delta and Aeromexico, partners since before SkyTeam’s inception in 2000. Delta’s investment in Aeromexico in 2011/2012 and subsequent board seat led to a joint venture with antitrust immunity in 2017. The pandemic hit both airlines hard, with Aeromexico filing for bankruptcy and Delta’s stake diminishing. The situation worsened in May 2021 when the US downgraded Mexico to Category 2 for safety concerns, halting Delta’s codeshare with Aeromexico and freezing their partnership until September 2023, when Category 1 status was reinstated. With that hurdle cleared, the DOT has intensified its efforts, despite the current administration’s rhetoric against its predecessor.
#USMexicoRelations #AviationNews #OpenSkiesAgreement
Originally reported by Cranky Flier Read More
