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Delta, Aeromexico to reconsider JV unless DOT changes conditions

Delta and Aeromexico have strongly objected to the conditions imposed by the US DoT to grant antitrust immunity to the carriers’ proposed transborder joint venture, and said they will reconsider the JV if DOT does not change course. DOT earlier this month granted tentative approval of the JV, but demanded that Delta and Aeromexico divest 24 slot pairs for Mexico-US services at Mexico City International Airport (MEX) and six slot pairs for US-Mexico services at New York JFK International Airport. DOT additionally proposed limiting the antitrust immunity for the JV to five years. In a joint filing to DOT, Delta and Aeromexico called the conditions “unprecedented, arbitrary, and untethered to any potential alleged harms related to the [JV],” adding, “The proposed conditions would jeopardize the sizeable consumer and economic benefits that [DOT] recognized would flow from the proposed [JV]. Moreover, they would severely diminish the economic viability of the [JV], and would compel [Delta and Aeromexico] to reconsider undertaking it.” The airlines previously accepted Mexican regulators’ terms for clearing the JV, which included the divestiture of eight slot pairs at MEX. Delta and Aeromexico argue that those divestitures are enough to safeguard competition and call on DOT to rescind its requirement that the carriers divest another 16 slot pairs at the airport as well as six JFK slot pairs. They also do not want their antitrust immunity limited to just five years.<br/>