Delta Air Lines (NYSE: DAL) and Grupo Aeromexico (Mexico: AEROMEX.MX) have filed an application with the U.S. Department of Transportation seeking antitrust immunity for a new joint venture on flights between the United States and Mexico.
The application marks a significant step in the creation of a $1.5 billion joint venture that will allow Delta and Aeromexico to compete more effectively on routes between the U.S. and Mexico. The joint venture will provide more options for travelers in both countries, while enabling joint investments by the two airlines, further improving the customer experience.
"Mexico is the most popular international destination for Delta customers, and our proposed joint venture will offer our customers more schedule and destination choices, whether traveling for business or pleasure," said Ed Bastian, Delta's President. "Approval of antitrust immunity will allow travelers to fully benefit from all the aspects of a future Delta-Aeromexico joint venture, including the combination of two complementary networks."
"We are thrilled at this opportunity to further deepen our relationship with Delta. The potential to align our networks and scheduling means that we will be able to offer greater customer choice than we would have been able to offer individually," said Andres Conesa, CEO of Grupo Aeromexico.
The request also will be submitted for approval to the Mexican antitrust authorities, the Comision Federal de Competencia Economica (Federal Economic Competition Commission). Upon receipt of the required governmental approvals, Delta and Aeromexico will seek to expand opportunities to co-locate and invest in airport facilities by improving gates, lounges and the overall connecting experience. Additionally the airlines will increase joint sales and marketing initiatives.
Through the proposed joint venture, the airlines will offer an expanded network within Mexico and connections to U.S. business centers in Los Angeles and New York. Aeromexico's hubs – Mexico City, Monterrey, Guadalajara and Hermosillo – will give Delta customers greater access to cities throughout Mexico. Delta will provide Aeromexico with a broad North American network via Delta's key hubs, including Atlanta, Detroit, Los Angeles, Minneapolis, New York, Salt Lake City and Seattle, and a strong marketing presence throughout the U.S.
Delta and Aeromexico launched their first codeshare in 1994 and both became founding airlines of SkyTeam in 2000. In 2011, Delta entered into an enhanced commercial agreement with Aeromexico, and in 2012, Delta invested $65 million in shares of Grupo Aeromexico, the parent company of Aeromexico. Currently Delta and Aeromexico offer more than 4,000 weekly codeshare flights, representing more than 80 daily transborder round-trip flights. A year ago, Delta and Aeromexico opened a joint MRO in Queretaro.
Grupo Aeromexico, S.A.B. de C.V. is a holding company whose subsidiaries are engaged in commercial aviation in Mexico and the promotion of passenger loyalty programs. Aeromexico, the largest airline in Mexico, operates more than 600 daily flights from its main hub in Terminal 2 at the Mexico City International Airport. Its destinations network features more than 80 cities on three continents, including 47 destinations in Mexico, 16 in the United States, 16 in Latin America, three in Europe, two in Asia and two in Canada. The Group's fleet of more than 120 aircraft is comprised of Boeing 787, 777, 767 and 737 jet airliners and next generation Embraer 145, 170, 175 and 190 models. In 2012, the airline announced the most significant investment strategy in aviation history in Mexico, to purchase 100 Boeing aircraft including 90 MAX B737 jet airliners and 10 B787-9 Dreamliners.
As a founding member of the SkyTeam airline alliance, Aeromexico offers customers 1,000 destinations in 178 countries served by the 19 SkyTeam airline partners rewarding passengers with benefits including access to 530 premium airport lounges around the world.
About Delta Air Lines
Delta Air Lines is working to be the best U.S. airline in Latin America and the Caribbean. Its achievements have been recognized with two top distinctions by Latin Trade's Best of Travel Annual Awards 2014, leading the categories of "Most Improvement Overall" and "Best Partnerships and Alliances," and being the only U.S. airline in this year's rankings. Delta continues to grow in Latin America through its long-term exclusive alliances with GOL Linhas Aereas Inteligentes and Aeromexico and is committed to building a solid regional footprint thus enhancing its global network and offering a better overall experience for its customers. Delta provides service to 30 countries and 53 destinations in the region offering over 1,800 weekly flights between Latin America/Caribbean and the U.S. Delta customers can receive real-time, on-the-go travel assistance in Spanish and Portuguese through Twitter channels @DeltaAssist_ES and @DeltaAjuda from 9 a.m. to 7 p.m. ET. Brazilian customers can also access Delta's dedicated Brazil Facebook page, visiting http://www.facebook.com/DeltaAirLinesBrasil.
Delta Air Lines serves more than 170 million customers each year. Delta was named to FORTUNE magazine's top 50 World's Most Admired Companies in addition to being named the most admired airline for the fourth time in five years. Additionally, Delta has ranked No.1 in the Business Travel News Annual Airline survey for four consecutive years, a first for any airline. With an industry-leading global network, Delta and the Delta Connection carriers offer service to 326 destinations in 59 countries on six continents. Headquartered in Atlanta, Delta employs nearly 80,000 employees worldwide and operates a mainline fleet of more than 700 aircraft. The airline is a founding member of the SkyTeam global alliance and participates in the industry's leading trans-Atlantic joint venture with Air France-KLM and Alitalia as well as a newly formed joint venture with Virgin Atlantic. Including its worldwide alliance partners, Delta offers customers more than 15,000 daily flights, with key hubs and markets including Amsterdam, Atlanta, Boston, Detroit, Los Angeles, Minneapolis/St. Paul, New York-JFK, New York-LaGuardia, Paris-Charles de Gaulle, Salt Lake City, Seattle and Tokyo-Narita. Delta has invested billions of dollars in airport facilities, global products, services and technology to enhance the customer experience in the air and on the ground. Additional information is available on delta.com, Twitter @Delta, Google.com/+Delta, Facebook.com/delta and Delta's blog takingoff.delta.com.