U.S. and Mexican airlines are competing for newly available access to Mexico City as Delta unveils plans to buy a much larger stake in Aeromexico.
The Transportation Department could soon announce new route authority for several carriers to Mexico City, using takeoff and landing slots that Aeromexico and Delta had to give up as a condition for approval of their joint venture. Alaska Airlines, JetBlue and Southwest are all in the running, along with Mexican low-cost carriers Volaris and VivaAerobus.
DOT plans to dole out 14 Mexico City slot pairs this year for U.S. service, concentrating on low-fare airlines to counteract the greater market power that antitrust immunity will give to the new Delta-Aeromexico joint venture.
Alaska Airlines, which has no service to the Mexican capital, has asked for authority to fly there twice a day from Los Angeles and once a day from San Francisco and San Diego. The SFO route and one of the LAX flights would use 737-900ERs; the others would use regional jets.
Southwest wants authority to add a fourth daily Houston-MEX flight, and to move one of the other three flights to more convenient times. JetBlue wants slots that would allow it to move its MEX-Ft. Lauderdale and MEX-Orlando departures out of Mexico City to later times in the day (both currently leave before 6 a.m.), and to add second frequencies on both routes.
Mexican low-cost carriers VivaAerobus and Volaris also want slots. VivaAerobus wants to start flying to Oakland three days a week and to San Antonio four days a week, and to operate daily roundtrips to Los Angeles and Las Vegas. Volaris wants to add new daily service to San Antonio and Washington D.C., and to add frequencies on its routes to New York, Los Angeles and Chicago.
Meanwhile, Delta said this week it plans to buy up a much larger stake in Aeromexico. It currently holds 4.2 percent of that airline’s shares, and now said it will buy another 32 percent. It already holds options to buy 12.8 percent, so after the transaction is over, Delta will hold ownership or options on 49 percent of Aeromexico’s shares – the same as its equity stake in Virgin Atlantic. Delta and Virgin also have a joint venture with antitrust immunity, and have used it to closely coordinate schedules on transatlantic routes to the U.K.
Delta owns smaller stakes in Brazil’s GOL and in China Eastern Airlines.
“The tender offer and investment (in Aeromexico) will further strengthen the relationship that will be established when our joint cooperation agreement is implemented in the second quarter,” said Delta CEO Ed Bastian.
Have you been to Mexico City lately? To me it’s one of the great sleeper cities of the Western Hemisphere. What about you?