By David Shepardson
WASHINGTON (Reuters) -A U.S. appeals court late on Wednesday temporarily halted a government agency’s order to force Delta Air Lines and Aeromexico to unwind a joint venture by January 1.
The airlines had sued to block the Transportation Department order to repeal the nearly nine-year-old joint venture that lets the carriers coordinate scheduling, pricing and capacity for U.S.–Mexico flights. The USDOT order was issued in September, as part of several U.S. actions aimed at Mexican aviation citing competition concerns.
The carriers said they faced substantial costs they could not recover even if a court later upheld the arrangement. The brief order from a three-judge panel cited a prior court decision on the standard for temporarily blocking administrative actions.
Delta, Aeromexico and USDOT did not immediately comment.
Last week, the Justice and Transportation Departments called the joint venture “legalized collusion” that controls “almost 60% of operations at the fourth-largest international gateway to and from the United States,” citing Mexico City flights.
Delta, which has a 20% stake in Aeromexico, has also argued that President Donald Trump’s administration is holding the joint venture to a stricter standard than other ventures including United Airlines opens new tab and ANA opens new tab.
The government has said anticipated problems from the venture include higher fares in some markets, reduced capacity and challenges for U.S. carriers due to inadequate competition.
In separate actions last month, the Trump administration revoked approval for 13 routes by Mexican carriers into the U.S. and canceled all combined passenger and cargo flights by Mexican airlines to the United States from Mexico City’s Felipe Angeles International Airport.
Transportation Secretary Sean Duffy said Mexico “illegally canceled and froze U.S. carrier flights for three years without consequences.”
Mexican President Claudia Sheinbaum said earlier she disagrees with the U.S. decision to revoke approval of the 13 routes.
(Reporting by David Shepardson; Editing by David Gregorio)
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