A U.S. appeals court overturned on Thursday the Trump administration's September 2025 order that sought to force Delta Air Lines (DAL.N) and Aeromexico (AERO.MX) to unwind a joint venture.
The airlines sued last year to block the U.S. Department of Transportation order to repeal the nearly 10-year-old joint venture, which lets the carriers coordinate scheduling, pricing and capacity for U.S.-Mexico flights. The order was issued as part of several U.S. actions aimed at Mexico's aviation sector over competition concerns.
A court put the order on hold last year pending the legal challenge.
The 11th U.S. Circuit Court of Appeals said USDOT "did not reasonably explain why it conducted a far more limited market analysis in this case than it has always done in the past or why it imposed a requirement for approval of the joint venture that it did not require of similar joint ventures it approved in Japan."
Last year, the Justice and Transportation departments called the joint venture "legalized collusion" that controls "almost 60% of operations at the fourth-largest international gateway to and from the United States," referring to Mexico City flights.
Delta, which has a 20% stake in Aeromexico, also argued that President Donald Trump's administration held the joint venture to a stricter standard than other ventures, including United Airlines (UAL.O) and Japan's ANA (9202.T).
Delta and Aeromexico praised the court ruling. Delta said the joint venture has "provided greater choice, more seamless travel, and increased connectivity for consumers while supporting U.S. jobs and economic growth."
Aeromexico said the ruling allows the airlines "to continue providing enhanced connectivity, a broader network, more convenient service options and increased competition."
USDOT said it will consider all available legal options and "will continue to work with the Mexican government to ensure it fulfills its obligations and treats all U.S. carriers fairly. We are encouraged by recent conversations with the government of Mexico and look forward to Mexico's full compliance with the agreement."
The court said because USDOT did not treat similar cases alike when it held Delta and the U.S.-Japan joint venture applicants to different standards for approval, its action was "arbitrary and capricious."
In separate actions last year, USDOT revoked approval for 13 routes by Mexican carriers into the U.S. and canceled all combined passenger and cargo flights by Mexican airlines to the United States from Mexico City's Felipe Angeles International Airport.
