Delta Air Lines Inc. is warning that 23 U.S-Mexico flights, including five nonstops from Atlanta, would be at risk of closing or seeing reduced service if the U.S. government follows through on a plan to end the airline’s Aeromexico partnership.
Delta executives and their allies in Georgia’s economic development community and Congress are pressing the Department of Transportation to reconsider its January decision not to renew antitrust immunity for the joint venture.
The Atlanta-based airline’s leaders say that what amounts to a diplomatic dispute between the Biden administration and Mexico’s government should not upend value chains that companies on both sides of the border have come to rely upon.
A bipartisan group of 12 members of Georgia’s congressional delegation sent a letter asking Transportation Secretary Pete Buttigieg to pursue other remedies to a dispute over Mexico’s adherence to aspects of the two countries’ air service agreement.
“It is our hope that the negotiations between the U.S. government and Mexico can continue so Georgians are not burdened with consequences of this decision,” the members of Congress wrote.
According to airline travel website The Points Guy, the dispute centers on landing slots at the Mexico City airport, which the U.S. believes are being issued to Aeromexico at the expense of other competitive entrants. Barring a change of heart by the DOT, Delta and Aeromexico will have to wind down their joint venture by October.
Meanwhile, proponents of the flight warn of dire economic consequences. Mexico eclipsed China as the top U.S. trading partner for the first time in 20 years in 2023, with the U.S. racking up nearly $500 billion in imports in 2022 as global trade patterns continued to shift.
While Mexico competes with Georgia in sectors like agriculture, automotive and aerospace, it continues to be a key source of both inputs and finished products like computers, transportation equipment, electrical equipment, machinery, processed foods and more.
Mexico is also a top destination for sales of Georgia-made goods, with $4.8 billion in exports in 2023 putting it at No. 2 behind Canada among the state’s export destinations. Georgia’s total trade with Mexico — the sum of imports and exports — stood at $18.6 billion last year.
Delta says that ending what it calls the Joint Cooperation Agreement with Aeromexico would likely force the closure of the five routes from Atlanta inaugurated after antitrust immunity was granted in 2016.
That includes nonstop flights between Hartsfield-Jackson in Atlanta and the cities of Guadalajara, Guanajuato (a major automotive hub), Mérida (a tourist haven on the Yucatan peninsula) and Monterrey (a key manufacturing zone). These flights alone served 662,000 people last year, and overall 45 million passengers have taken advantage of flights operated by the joint venture in the last seven years, the airlines asserted.
Losing the flights could threaten the commercial links in industries like forestry, building materials and advanced electronics that rely on the ability of professionals to travel back and forth between the markets, the letter stated, adding that trade with Mexico supports 157,000 Georgia jobs.
“The direct flights from ATL to key Mexican hubs combined with easy one-stop connections to points throughout Mexico, enabled by the JCA, are important as Georgia continues to grow its trade
opportunities with Mexico,” the members of Congress wrote.
According to the airlines, ending some flights and reducing services or seats on others would result in $800 million in lost “consumer benefits” — code for higher airfares. A million fewer travelers between the two countries would lead to $200 million and $160 million in lost tourism spending annually in the U.S. and Mexico, respectively, they said.
In an op-ed in the Atlanta Journal-Constitution, Delta CEO Ed Bastian joined with Aeromexico CEO Andrés Conesa to highlight what they described as substantive but fragile benefits of the partnership, which plays a key role in connecting families across the Rio Grande. Some 12.5 million Mexicans visited the U.S. in 2022, representing 24 percent of international arrivals.
As the chief executives of Delta and Aeromexico, we recognize the importance of the diplomatic goals of both nations. But we also agree that punishing consumers and jeopardizing thousands of jobs in both nations is a punitive and counterproductive approach that will not produce a positive outcome for the Transportation Department. There is ample time for both governments to engage in further negotiations and make meaningful progress without harming the American and Mexican people.
Delta CEO Ed Bastian and Aeromexico CEO Andrés Conesa
In a LinkedIn post, Georgia Department of Economic Development Commissioner Pat Wilson cited the op-ed, noting that connectivity breeds business and that Georgia remains committed to boosting trade with Mexico.
“The State of Georgia has had full-time international representation in Mexico since 1993, and in the last decade, exports to Mexico have grown by more than 62 percent,” Mr. Wilson wrote, offering the state’s support to Delta’s appeal.
Read the letter from Georgia’s congressional delegation below:
Georgia-Delegation-Letter-to-DOT-Regarding-Joint-Cooperative-Agreement-JCA-FINAL-Signed-3.26.24
The Pendleton Group is the presenting sponsor of Global Atlanta's Economic Development Channel. Subscribe here for monthly Economic Development newsletters.
The Dean Rusk International Law Center at the University of Georgia is the presenting sponsor of Global Atlanta's Diplomacy Channel. Subscribe here for monthly Diplomacy newsletters.