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US orders Delta, Aeromexico to end 10-year partnership

The United States Department of Transportation has ordered Delta Air Lines and Aeromexico to terminate their nearly 10-year joint venture by January 1, citing anticompetitive practices in U.S.–Mexico City markets.

The partnership, launched in 2016, allowed the airlines to coordinate schedules and pricing on cross-border flights.

The DOT said this gave the carriers an unfair advantage as “predominant competitors,” creating “unacceptable actual and potential harm for stakeholders, including consumers.”

“This action is necessary because of ongoing anticompetitive effects in U.S.-Mexico City markets that provide an unfair advantage to Delta and Aeromexico as two predominant competitors and create unacceptable actual and potential harm for stakeholders, including consumers,” the Transportation Department said in a filing late Monday.

Delta criticized the decision, saying it would “cause significant harm to U.S. jobs, communities and travelers between the U.S. and Mexico.”

Aeromexico said it would maintain reciprocal frequent flyer benefits and cross-airline bookings despite the ruling.

Earlier this year, the Transportation Department had proposed ending the venture, prompting the airlines to argue it had contributed $310 million to the U.S. economy and that its dissolution would benefit competitors.

The DOT’s order does not affect Delta’s 20% equity stake in Aeromexico.