Delta: Unchecked DOT Decision Threatens Five Atlanta-Mexico Flights
Antitrust Immunity Non-renewal Risks U.S-Mexico Flights
Delta Air Lines Inc. has expressed concern that about 23 U.S.-Mexico flights, including five non-stops from Atlanta, could face potential cancellations or diminished service if the U.S. government should implement a plan to end the airline’s partnership with Aeromexico. This plan comes in line with the Department of Transportation’s (DOT) proposed decision to halt the extension of antitrust immunity for their joint venture. Delta executives, allies from Georgia’s economic development community, and Congress are making efforts to request the DOT to reassess this decision.
A diplomatic rift between the U.S. government and its Mexican counterpart should not cause a halt in the value chains that firms from both sides of the border heavily rely on, say Delta executives. This call was also echoed by a bipartisan group of 12 of Georgia’s congressional delegation members.
Importance of the Atlanta-Mexico City Route
One notable contention point of the dispute is the aircraft landing slots at Mexico City’s airport. The U.S. believes that Aeromexico disproportionately benefits from these slots, disadvantaging other contenders wishing to enter the space. Delta and Aeromexico will have to terminate their joint venture by October unless a U-turn on the DOT’s part happens.
Advocates for the Atlanta-Mexico City flight predict severe economic implications if this decision proceeds. Mexico, which outperformed China to become the leading U.S. trading partner for the first time in two decades in 2023, will have an uphill climb in maintaining this position without enough flights connecting the two countries.
The reliability on flights from Atlanta to Mexico also served as trade links for industries, ensured the seamless movement of professionals between markets, and supported 157,000 jobs in Georgia.
Consequences of Termination
According to estimations made by the airlines, cancellation of some flights and downsizing of others will generate a loss in “consumer benefits”—a phrase referring to increased airfares—totalling $800 million. Furthermore, the predicted decline in visitor numbers between the two nations, to the tune of one million travelers, can potentially lead to roughly $200 million and $160 million in lost tourism revenues annually for the U.S. and Mexico, respectively.
Delta is urging for further negotiation and cooperation between governments rather than a hard stance that could hurt American and Mexican industries.
Flights in Danger
Termination of the Joint Cooperation Agreement between Delta and Aeromexico will likely result in the closure of five routes from Atlanta that were established post arguments that antitrust immunity was granted in 2016. The threatened flight routes include non-stop flights from Atlanta’s Hartsfield-Jackson to Guadalajara, Guanajuato, Mérida, and Monterrey.
The pressing question now is whether the governments will negotiate further or allow the potential negative impacts predicted to take effect.
