Delta, Aeromexico Win Court Fight to Preserve U.S.–Mexico Joint Venture

ATLANTA — Delta Air Lines (DL) and Aeromexico (AM) may continue coordinating flights between the United States and Mexico after a federal appeals court vacated a U.S. Department of Transportation order that would have ended their joint venture and withdrawn its antitrust immunity.

The U.S. Court of Appeals for the Eleventh Circuit ruled Thursday that DOT had not adequately explained why it used a much narrower competition analysis for Delta and Aeromexico than it had in earlier international airline cases. The court also found that the department had not justified imposing an open-skies requirement it did not apply to similar ventures involving U.S. and Japanese airlines.

The court called DOT's action “arbitrary and capricious” and vacated the agency's September 2025 final order. Aeromexico said the joint venture and its antitrust immunity remain in effect. Delta said the partnership had given passengers more choice, smoother connections, and a broader network.

The immediate effect is continuity. The court had already stayed DOT's order in November 2025, before a January 1, 2026, deadline to unwind the venture. The airlines never stopped coordinating under the agreement, so the new judgment does not restore flights or passenger benefits that had been removed.

It also does not guarantee lower fares or additional service. Delta and Aeromexico have not announced schedule or capacity changes tied to the ruling.

Why DOT's Review Failed

DOT approved the venture and granted antitrust immunity in 2016. The agreement took effect in 2017 and permits Delta and Aeromexico to coordinate pricing, schedules, capacity, and revenue across their U.S.–Mexico networks. That cooperation goes beyond a standard codeshare, in which one airline can sell a seat operated by another without jointly setting commercially sensitive terms.

When DOT first reviewed the venture, it examined the overall U.S.–Mexico market and 1,687 individual city-pair markets. It also required the airlines to surrender 24 slot pairs at Mexico City International Airport (MEX) and limited the original immunity grant to five years.

The department took a different approach when it ordered the venture's approval and immunity terminated in September 2025. That review centered on competition at MEX, where DOT objected to the Mexican government's slot policies, reductions in airport capacity, and removal of all-cargo operations.

The appeals court said DOT did not explain why those conditions justified abandoning its broader method. Its opinion noted that MEX accounted for 21% of U.S.–Mexico flights and that the agency's 2025 order contained no updated country-pair analysis, no review of the 1,687 city pairs, and no assessment of how market shares would change if the venture continued.

The majority also compared the case with the antitrust-immunized United Airlines (UA)–All Nippon Airways (NH) and American Airlines (AA)–Japan Airlines (JL) ventures. Tokyo Haneda Airport (HND) was not fully covered by the U.S.–Japan open-skies framework and remained subject to cargo and slot restrictions, yet DOT approved both ventures. The court found that the agency had not adequately explained why Mexico's compliance at MEX was necessary for Delta and Aeromexico when equivalent compliance at Haneda was not required.

Judge Robin Rosenbaum agreed that the order should be vacated because of that inconsistent open-skies treatment. In a separate opinion, however, she rejected the majority's conclusion that DOT also needed to conduct the same comprehensive market analysis when withdrawing an approval as when considering a new venture.

That distinction matters for what the judgment does not decide. The court did not rule that the Delta–Aeromexico venture is pro-competitive, reject DOT's concerns about Mexico City, or remove the department's authority to review airline joint ventures. The majority said it did not reach the airlines' other arguments that DOT relied on speculation, overlooked alternatives, or failed to support parts of its case.

What the Decision Means for Delta and Aeromexico

The venture is central to both carriers' transborder networks. Aeromexico can feed passengers through Mexico City and other Mexican gateways, while Delta contributes its U.S. network and sales base. Antitrust immunity allows the carriers to plan that business together without treating each airline's flight as a competing product.

Delta also owns about 19% of Grupo Aeromexico, making the case more than a codeshare dispute. Aeromexico's latest annual filing puts Delta's stake at approximately 18.7% and describes the joint agreement as a core part of the carriers' commercial relationship.

The ruling removes the immediate legal requirement to separate their pricing, scheduling, capacity planning, and revenue sharing. Any decision to expand service remains commercial and may still depend on airport access, bilateral regulatory conditions, and separate U.S. restrictions affecting Mexican carriers.

For passengers, existing tickets, schedules, codeshares, loyalty reciprocity, and lounge arrangements continue. The ruling alone provides no basis to predict how fares will move. Prices will still depend on route-level competition, demand, capacity, and the carriers' revenue strategy.

DOT May Continue the Fight

DOT said it would consider all available legal options. The department told Reuters that it would continue working with the Mexican government to secure compliance with the bilateral aviation agreement and said recent discussions had been encouraging.

The department could ask the three-judge panel or the full Eleventh Circuit to rehear the case, and it could later seek review by the U.S. Supreme Court. Under the Federal Rules of Appellate Procedure, parties in a civil case involving a federal agency ordinarily have 45 days from judgment to seek rehearing.

DOT could also begin another administrative review. The decision leaves the agency's statutory authority intact, but another attempt to withdraw immunity would need a record that addresses the court's objections to inconsistent treatment and unexplained changes in analytical method.

Aeromexico said it is reviewing the opinion and potential next steps with Delta and its legal advisers. Until DOT acts, the joint venture continues under the same antitrust protection it had before Thursday's judgment.