Background
Delta Air Lines and Aerovias de México applied in 2015 for federal approval and antitrust immunity for an integrated joint venture covering air service between the United States and Mexico. The Department of Transportation approved the venture in 2016 after analyzing the overall U.S.-Mexico market and 1,687 city-pair markets, but it required the airlines to divest 24 slot-pairs at Mexico City’s Benito Juarez International Airport and initially limited antitrust immunity to five years.
When the airlines sought renewal, DOT focused on later actions by the Mexican government at the Mexico City airport, including reductions and reallocations of takeoff and landing slots and a ban on all-cargo operations. DOT concluded that those policies distorted competition, benefited the joint venture, and conflicted with the countries’ open-skies agreement. In September 2025, DOT terminated its approval of the venture and withdrew its antitrust immunity. The airlines petitioned for review, and the Eleventh Circuit stayed DOT’s order while the case was pending.
The Court’s Holding
The Eleventh Circuit held that DOT’s final order was arbitrary and capricious under the Administrative Procedure Act. The majority concluded that DOT departed without adequate explanation from its uniform practice of evaluating airline joint ventures through broad network, country-pair, and city-pair market analyses. Rather than update its nine-year-old market analysis, DOT based its decision on conditions at a single airport that accounted for only 21% of U.S.-Mexico flights.
The court also held that DOT failed to treat like cases alike. DOT characterized compliance with an open-skies framework as necessary to obtain and maintain antitrust immunity for the Delta-Aeromexico venture, yet it had approved two U.S.-Japan joint ventures operating at Tokyo’s Haneda Airport even though that airport was carved out of the applicable open-skies agreement. DOT did not adequately explain the different standards. The court therefore vacated the final order without reaching the airlines’ remaining challenges.
Judge Rosenbaum concurred only in the judgment. She agreed that DOT acted arbitrarily by treating open-skies compliance as necessary despite the Haneda exception, but she rejected the majority’s conclusion that DOT also had to justify using a narrower analysis when withdrawing an existing approval than when reviewing a new application.
Key Takeaways
- An agency must reasonably explain a substantial departure from its established analytical method, even under deferential APA review.
- DOT could not require open-skies compliance in this proceeding without explaining why comparable joint ventures operating at Tokyo’s Haneda Airport received different treatment.
- The court vacated DOT’s termination order but did not decide the airlines’ separate arguments concerning speculation, evidentiary support, internal consistency, or alternative regulatory measures.
Why It Matters
The decision preserves, at least unless and until DOT takes further adequately reasoned action, the approval and antitrust immunity supporting the Delta-Aeromexico joint venture. More broadly, it requires DOT to confront its prior practices and comparable approvals when reassessing international airline alliances.
The separate concurrence highlights a significant point of disagreement about agency review: whether the analysis used for an initial approval supplies the proper benchmark when an agency later considers withdrawing that approval.