The Trump administration has urged a U.S. appeals court to dismiss Delta Air Lines and Aeromexico’s bid to delay the termination of their cross-border joint venture, arguing that the partnership undermines fair competition and gives both carriers outsized control over a major international air corridor.
According to a Reuters report, the Departments of Transportation (DOT) and Justice (DOJ) filed documents describing the alliance as a form of “legalized collusion” that allows the two airlines to coordinate prices and schedules on routes between the United States and Mexico. The government said the two carriers together control nearly 60% of flight operations at Mexico City International Airport, one of the largest international gateways for U.S. travelers.
The joint venture, which began in 2016, is set to expire by January 1, 2026, under a DOT order issued earlier this year. The administration’s latest court filing marks a renewed effort to ensure the partnership is dissolved on schedule.
Delta and Aeromexico Seek to Delay Dissolution
Delta Air Lines and Aeromexico have asked for an extension of the 2026 deadline, seeking more time for the appeals court to fully review the matter before the partnership is dismantled. The airlines argue that an abrupt termination would harm both companies, disrupt air travel, and result in economic losses on both sides of the border.
Delta, which owns a 20% stake in Aeromexico, has emphasized that the alliance supports about 4,000 U.S. jobs and adds more than $310 million to the American economy annually. The company previously warned that dissolving the partnership could eliminate nearly $800 million in annual consumer benefits derived from lower fares, expanded flight options, and improved connectivity between the two countries.
In addition, Delta and Aeromexico maintain that the alliance has been vital in sustaining two dozen routes that might otherwise be unprofitable without shared operations. The carriers contend that the partnership has strengthened air travel between the U.S. and Mexico and provided more consistent service for leisure and business travelers alike.
Government Says Airlines’ Arguments Are Exaggerated
The Trump administration has pushed back against those claims, asserting that the airlines’ warnings about job losses and consumer harm are overstated. The government’s filing argued that ending the joint venture would actually enhance consumer choice and bring more competition to the transborder aviation market.
Officials maintain that the alliance eliminates direct competition between Delta and Aeromexico, giving them excessive influence over fares, flight frequency, and available routes. According to the filing, the joint venture reduces opportunities for other U.S. and Mexican carriers to compete freely, leaving passengers with fewer independent choices.
The government also noted that Delta and Aeromexico have had several years to prepare for the dissolution since the DOT’s order was first issued. By requesting an extension, officials say, the airlines are effectively seeking to prolong an anti-competitive arrangement rather than adjust to open market conditions.
Alliance Under Scrutiny Across Administrations
The Delta-Aeromexico partnership was originally approved during the Obama administration in 2016, when both airlines were granted antitrust immunity to collaborate on pricing, scheduling, and route planning. However, successive administrations have questioned whether the alliance still serves public interest as aviation markets and international agreements evolved.
The Biden administration also considered dismantling the joint venture in 2024 after raising concerns over Mexico’s aviation regulatory environment. U.S. officials argued that Mexico’s system for allocating airport slots—essentially takeoff and landing permissions—failed to comply with international standards, restricting access for American carriers.
These concerns intensified after Mexico’s government decided to limit flights at Benito Juarez International Airport in Mexico City, citing congestion. The move came alongside efforts to redirect air traffic to the newly constructed Felipe Angeles International Airport, located outside the capital. Washington viewed these policies as disadvantageous to U.S. airlines, claiming they violated agreements designed to ensure fair access to airspace between the two nations.
Tensions Rise Over Route Approvals
The dispute over the Delta-Aeromexico alliance has been compounded by broader aviation tensions between the U.S. and Mexico. Reuters reported that, in separate regulatory actions last week, the Trump administration revoked approval for 13 routes operated by Mexican airlines into the United States.
The administration also rescinded authorization for combined passenger and cargo flights from Mexico’s Felipe Angeles Airport to U.S. destinations. The decision effectively blocked Mexican carriers from using the new airport for flights to the U.S., reflecting Washington’s growing frustration over Mexico’s handling of airport access and aviation oversight.
The U.S. has long accused Mexico of maintaining a non-transparent slot allocation regime that favors domestic carriers and limits foreign competition. By tightening restrictions on Mexican airlines, the Trump administration appears to be using regulatory leverage to press for compliance with international aviation standards.
Potential Industry Shake-Up
The U.S.-Mexico air travel corridor ranks among the busiest cross-border markets in the world, serving millions of passengers each year. Should the Delta-Aeromexico alliance be dissolved, analysts expect intensified competition as airlines such as American Airlines, United Airlines, and Volaris look to expand their presence on lucrative routes between the two nations.
While some analysts believe that increased competition could lead to lower ticket prices and more route diversity, Delta and Aeromexico warn that breaking up their partnership could cause service disruptions and limit connectivity, particularly for smaller destinations dependent on shared operations.
Investor sentiment toward Delta has remained neutral, according to Stocktwits data, as traders await clarity on how the legal dispute could impact the carrier’s network strategy and financial performance.
