US Government Rejects Mexican Routes, Threatens Additional Cuts

Three months ago the US Government required that Mexican airlines file routes, the first step towards curtailing their transborder operations. Today the Department of Transportation took the next step, disallowing operations of a dozen existing and soon-to-be-launched routes and proposing the termination of belly cargo services to/from Mexico City’s Benito Juarez International Airport (MEX).

The US position notably plays on some details of the Mexican government’s prior actions in the market.

Prohibiting belly-cargo operations at MEX is clearly not in the short-term interest of shippers and consumers in the U.S.-Mexico market. However, the ongoing prohibition of all-cargo operations at MEX and the corresponding competitive imbalance vis-à-vis combination carriers is untenable. The Department’s overriding goal in taking this step is to persuade the Government of Mexico to rescind its prohibition against U.S. all-cargo carriers operating at MEX, consistent with its obligations under the Agreement.

– US DOT Filing

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Curtailing Cargo

A February 2023 Mexican Presidential Decree prohibited all-cargo operations at MEX. The terms of the Decree initially provided air carriers with 108 business days to cease all‐cargo operations at MEX. While declaring that “forced removal of all-cargo operations out of MEX, with 108 business days’ notice, is in sharp conflict with GoM’s obligations under the Agreement” the US Department of Transportation is now issuing its own 108-day deadline to halt belly cargo operations between MEX and the USA.

The DOT recognizes this is “clearly not in the short-term interest of shippers and consumers in the U.S.-Mexico market” but suggests it has no choice, as other efforts to sway the Mexican government have come up short.

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Rejecting Routes

In addition to the proposed halt of belly cargo from MEX, the US DOT proposes to kill several routes Mexican airlines currently operate or plan to start over then next 60ish days. DOT says it is taking the action “based on the finding that operation of the services associated with these schedules will adversely affect the public interest, as a result of actions taken by the Government of Mexico (GoM) that have impaired certain operating rights provided to U.S. carriers under the 2015 U.S.-Mexico Air Transport Agreement (the Agreement), and the denial by the GoM of the fair and equal opportunity of U.S. air carriers to exercise those operating rights.”

As a result, the US DOT has identified 13 routes that must be halted or not launch. Aeromexico (and its Connect regional brand) will be required to halt currently operating service between Santa Lucia (NLU) and both Houston (IAH) and McAllen (MFE).

In addition, the following routes will not be permitted to launch:

• Aeromexico’s MEX-SJU, scheduled to begin on 29 October (i.e. <24 hours notice!)
• Volaris’ MEX-EWR, scheduled to begin on 2 November
• Nine VivaAerobus routes from NLU set to launch in the next 60 days, serving Austin (AUS); New York (JFK); Chicago (ORD); Dallas/Ft. Worth (DFW); Denver (DEN); Houston (IAH); Los Angeles (LAX); Miami (MIA); and Orlando (MCO)

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The US DOT also notes that all future new routes or increased services requested at MEX or NLU will be rejected.

The DOT also adds a note to the declaration, assuring the public that it really did not want to make these cuts, but that it has no other choice given Mexico’s past behavior:

The Department finds that disapproval of the schedules providing for the services specified above is an appropriate response to the longstanding and widespread noncompliance by the GoM with the Agreement, and the resulting broad collective harm its action has had, and for considerable part will continue to have, on the services of U.S. combination and all-cargo carriers as described herein.

The Department’s overriding goal is not the perpetuation or escalation of this situation, but rather an improved environment wherein all air carriers of both parties will be able to exercise fully their bilateral rights. The Department is prepared to reconsider its action to disapprove the above schedules should the GoM return to full compliance with its obligations under the Agreement.

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Separately, Delta Air Lines and Aeromexico filed a lawsuit objecting to the termination of their coordinated joint venture operations. How that plays out remains to be seen.