Should Regulators Be Allowed to Revoke Long-Standing Airline Alliances?
# Appeals Court Grounds DOT’s Delta-Aeroméxico Breakup
The Eleventh Circuit vacated a U.S. Department of Transportation order that terminated Delta Air Lines and Aeroméxico’s approval and antitrust immunity for their U.S.–Mexico joint venture. The court said DOT’s reasoning was arbitrary and capricious—but did not decide whether the partnership should ultimately survive.
The dispute began after DOT moved to end the carriers’ nearly decade-old alliance, which allowed them to coordinate more closely on flights between the United States and Mexico. Antitrust immunity is a major advantage: It permits partners to coordinate schedules, pricing and capacity in ways that normally could raise competition concerns.
The legal question was whether DOT had adequately explained its decision to withdraw the approval and immunity. The Eleventh Circuit said no. The agency’s stated reasoning could not support the termination order, so the court vacated it and sent the matter back. The panel did not reach Delta and Aeroméxico’s additional arguments that DOT relied on speculation, unsupported facts and inconsistent analysis.
For airlines and other transportation companies, the ruling is a warning that regulators cannot unwind a major commercial alliance with conclusory findings or a thin explanation. But it is not a permanent victory on the merits: DOT may revisit the joint venture and issue a new decision supported by a stronger record.
**Bottom Line:** Delta and Aeroméxico keep their legal win for now, but the alliance’s long-term future remains unsettled.
Source: https://www.courtlistener.com/opinion/10954426/delta-air-lines-inc-v-us-department-of-transportation/
Do you think regulators should be able to revoke alliance approvals after years of operation?
