Aeromexico asks US court to block Trump order forcing end to Delta joint venture

By David Shepardson WASHINGTON (Reuters) -Aeromexico asked the 11th Circuit Court of Appeals on Friday to halt a Trump administration order forcing it to unwind a joint venture with Delta Air Lines by January 1 that lets the carriers coordinate scheduling, pricing and capacity decisions for U.S.–Mexico flights. Aeromexico said it would face substantial costs that it could not recover even if a court later upheld the arrangement. In September, the U.S. Department of Transportation ordered an end to the nearly nine-year-old joint venture as part of several actions aimed at Mexican aviation, citing competition concerns. USDOT did not immediately issue a comment. Aeromexico said the order requires it to "divert existing and hire new staff, establish a new brand presence in the U.S., separate its information technology platforms for U.S. pricing and sales from Delta's." The Mexican carrier added the airlines would suffer "concrete, calculable harm from such an upheaval to their brand and operations." In August, USDOT said the joint venture needs to end because of "ongoing anticompetitive effects in U.S.-Mexico City markets that provide an unfair advantage to Delta and Aeromexico." The carriers account for about 60% of passenger flights from Mexico City Airport to the U.S. The airport is the fourth-largest international gateway to and from the United States. Aeromexico said it holds with Delta a 20% seat share in the U.S.-Mexico market, compared with 21% for American Airlines. USDOT, which is not requiring Delta to sell its 20% equity stake in Aeromexico, has said likely problems from the venture include higher fares in some markets, reduced capacity and challenges for U.S. carriers due to government intervention. Delta argues that up to $800 million in annual consumer benefits could evaporate, two dozen routes could be canceled and smaller aircraft could replace existing planes if the joint venture goes away. (Reporting by David Shepardson; Editing by Richard Chang)

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