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Some interesting news broke late Friday afternoon from the United States Department of Transportation: the feds declined to renew the partnership between Delta Air Lines and Aeromexico.
“The Department is levying (blame) for the decision sits squarely on the Mexican government and its actions surrounding access to Mexico City’s Benito Juarez International Airport (MEX),” explains PaxEx.Aero’s Seth Miller. “Specifically, the DOT calls out the removal of cargo operations at MEX, and reduction of capacity for passenger service at the airport.”
This may surprise you — but I wonder if there was some corruption involved. The DOT’s order reads:
Both the Department and the Mexican competition authority, the Comisión Federal de Competencia Económica (COFECE), found that the slot allocation regime at MEX was opaque and anticompetitive, and that Aeromexico, the largest slot holder, was the primary beneficiary. Through anticompetitive rules and insufficient enforcement, Aeromexico had been able to underutilize its slot portfolio while simultaneously keeping slots out of the hands of competitors.
On the other hand, was the writing already on the wall? Did Delta maybe want the DOT to play the bad guy?
“Although this decision was prompted by frustrations with the Mexican government’s decision to limit passenger (and cargo) capacities into the Mexico City airport, I believe relations have been strained between Delta and Aeromexico over the past few years,” point.me Mileage Run consultant and booker Miles Jackson told us.
Here is something very important to note: the dismissal was issued “without prejudice.” That means there’s time for Delta and AeroMexico to appeal.
The partnership is still intact through October 26, 2024. That’$ a lot of time for thing$ to happen — e$pecially during a United $tate$ election year.
How Does This Affect Mileage Runs?
Most of our readers’ first thought was probably, “What happens to the MQD runs?!”
Flying Aeromexico business class trips and crediting those flights to the passenger’s Delta SkyMiles number has long been a good way to earn elevated Medallion Qualification Miles (MQD).
So, are Aeromexico MQD trips in jeopardy?
Keep in mind there’s still ten months for this to get figured out. Aeromexico mileage runs between now and then are probably safe bets. In fact, this could be good news — at least for a while.
“I believe this decision by the Department of Transportation will lead to more competitive fare offers by Aeromexico,” point.me’s Mr. Jackson said. “As a result, in the short term, this could be great news for those seeking leveraged Mileage Runs. After all, Delta had a strong hand in setting many Aeromexico fares. Now, Aeromexico will be free to price those along with their marketing efforts. In the long term, this competition might lead to a further straining of the relationship between the airlines.
“I am not sure, but this might open the door for Aeromexico to once again be able to sell tickets to Europe and Asia from the United States (via a Mexico airport,)” he added, “since they have been barred from doing this since their bankruptcy proceedings in late 2021. We are monitoring the situation and will use every resource possible to leverage this and any future developments for the benefit of our clients seeking the best Mileage (Elite Status) Run earnings.”
After that? My guess is that AeroMexico will remain a SkyTeam partner for at least a while and AeroMexico trips will earn something in terms of MQD.
What do you think of all this?
H/T: Charlie Mortling
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BUMMER
This doesn’t change anything with respect to SkyTeam. Aeromexico was in it well before this JCA/ATI came about and this won’t force it out.
As for setting fares, that doesn’t have to change until after the end of the IATA Summer season, assuming any appeals that might happen fail. So in the short term I wouldn’t expect too much to change, unless the two decide to accelerate unwinding the partnership. But since they both want it (the idea Delta wants out, lacking any specific reasons, is bonkers, especially considering new routes recently announced to grow the partnership) why would they cut it early?
And the DOT, on behalf of many US carriers, has been pressuring its Mexican counterparts for years, basically since AMLO took over and completely shifted aero policy in the country. It is decidedly not an election year play.
Doesn’t delta own 50% of them? Doubt sky team is going away.
MQD earn on Aeromexico is much reduced given the devaluation that occurred at the end of 2023.
The 30% MQD earn on actual miles flown is still better than most DL ticketed flights but not by much. But being able to fly over MEX and skip the often chaotic connections there is probably worth earning a few less MQDs.