Mexican Regulators Put Conditions on Delta-Aeromexico Transaction

MEXICO CITY—Mexican antitrust regulators said Monday that they have conditioned approval of an enhanced partnership between Delta Air Lines Inc. and Mexico's biggest carrier Grupo Aeromexico SAB to the two giving up certain takeoff and landing slots at Mexico City's international airport and eliminating duplication of designations on cross-border routes.

The two carriers are awaiting a series of approvals for Delta to raise its stake in Aeromexico to 49% from around 17% at present.

The conditional authorization by the Mexican Competition Commission comes after the Mexican Senate recently ratified a more liberal air treaty between the U.S. and Mexico.

The airlines have also applied for U.S. antitrust immunity to step up their joint-venture.

The commission said that under the terms proposed by the airlines, the transaction could have hindered competition on cross-border flights between Mexico and the U.S., while saturation at the Mexico City airport limits access to takeoff and landing slots for potential competing carriers.

At present, Delta exercises competitive pricing pressure on Aeromexico for flights between Mexico and the U.S., it added.

Aside from relinquishing some takeoff and landing slots, one of the two carriers must eliminate overlapping route designations between Mexico and the U.S., the commission said.

Aeromexico said in a release that the two airlines are evaluating the resolution and conditions imposed by Mexican regulators. Regulatory clearance by the U.S. Department of Transport is pending, Aeromexico added.

Delta and Aeromexico began code-sharing in 1994. The two signed an expanded commercial agreement in 2011, and in 2012 Delta took a stake in the Mexican airline.

Write to Anthony Harrup at [e-mail]

(END) Dow Jones Newswires

May 02, 2016 21:55 ET (01:55 GMT)

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