Trump administration orders Delta, Aeromexico to unwind joint venture by Jan. 1

The Trump administration ordered Delta Air Lines and Aeromexico to end by Jan. 1 their nearly decade-old joint venture that allows them to coordinate schedules and prices for flights between the U.S. and Mexico.

“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.

Both Delta and Aeromexico said in separate statements that the carriers were disappointed by the department’s decision and were reviewing the order before considering next steps. Delta said it will “cause significant harm to U.S. jobs, communities and consumers traveling between the U.S. and Mexico.”

Aeromexico said the carriers will continue to offer flights on each other’s airline as well as frequent flyer program reciprocity, in which customers can earn and burn miles.

The Biden administration had weighed withdrawing antitrust immunity for the joint venture, which began in 2016. The dispute with Mexico is part of a series of long-running complaints from the U.S. about competition between the two countries.

The Transportation Department proposed to unwind the venture in July, leading the airlines to object. Both airlines responded in a filing, saying the partnership generated $310 million for the U.S. economy and, if unwound, would lead to a loss in economic benefits for the U.S., while the market will be captured by their competitors.

Monday’s order doesn’t change Delta’s 20% equity stake in Aeromexico.