The US Department of Transportation (DOT) has issued a Show Cause order outlining how it intends to reallocate the twenty-four México City International and four New York JFK slot pairs Aeroméxico (AM, México City International) and Delta Air Lines (DL, Atlanta Hartsfield Jackson) have agreed to relinquish as a condition for the granting of antitrust immunity for their joint-venture.
The DOT required the divestment to placate its concerns about any possible anti-competitive impact the AeroMéxico-Delta partnership may have in the New York JFK and Mexico City markets.
As previously reported, the reallocation proceedings have been divided into two phases:
Phase One:
- Fourteen Mexico City slot-pairs shall be transferred as soon as practicable in time for use in the IATA Northern Summer 2017 season (which begins March 26, 2017);
- Two New York JFK slot-pairs shall be transferred as soon as practicable in time for use in the IATA Northern Summer 2017 season.
Phase Two:
- Ten Mexico City slot-pairs shall be transferred in time for use in the IATA Northern Summer 2018 season (which begins March 25, 2018);
- Two New York JFK slot-pairs shall be transferred in time for use in the IATA Northern Summer 2018 season.
In Phase Two, operators have to demonstrate to the DOT that they have exhausted "reasonable efforts" to acquire the slots themselves through the respective airport’s normal allocation process before AeroMexico/Delta are be required to transfer them. To achieve this, the DOT says it will consider the selected carriers to have exhausted "reasonable efforts" if they have made the filings required by the respective slot coordinator(s) and have not received slots by seven business days following the conclusion of the Northern Summer 2018 scheduling season conference, scheduled to take place on November 7-10, 2017 (i.e. by November 21, 2017).
Carriers eligible for the freed up slots at Mexico City included Alaska Airlines, Southwest Airlines, jetBlue Airways, Frontier Airlines, Sun Country Airlines, Virgin America, Allegiant Air, Spirit Airlines, Hawaiian Airlines, Volaris, and VivaAeroBus. Those eligible for the New York JFK slots included: Alaska Airlines, Southwest, Frontier, Sun Country, Virgin America, Allegiant, Spirit, Hawaiian, Interjet, Volaris, and VivaAerobus.
However, only jetBlue Airways, Southwest Airlines, Interjet, Alaska Airlines, Volaris, and VivaAerobus submitted proposals.
In its Show Cause order published March 2, 2017, the DOT said it intended to award the following carriers the following slots at the following cities:
-Alaska Airlines (AS, Seattle Tacoma International):
- 2 slot-pairs for service to Los Angeles International – Phase One;
- 1 slot-pair for service to San Francisco – Phase One;
- 1 slot-pair for service to San Diego International – Phase One.
-JetBlue Airways (B6, New York JFK):
- 2 slot-pairs for service to Fort Lauderdale International – Phase One;
- 2 slot-pairs for service to Orlando International – Phase One;
- 2 slot-pairs for service to Los Angeles International – Phase Two.
-Southwest Airlines (WN, Dallas Love Field):
- 2 slot-pairs for service to Houston Hobby – Phase One;
- 1 slot-pair for service to Fort Lauderdale International – Phase Two;
- 1 slot-pair for service to Los Angeles International – Phase Two.
-Volaris (Y4, México City International):
- 1 slot-pair for service to San Antonio International – Phase One;
- 1 slot-pair for service to New York JFK – Phase One;
- 1 slot-pair for service to Los Angeles International – Phase One;
- 1 slot-pair for service to Denver International – Phase Two;
- 1 slot-pair for service to Washington Dulles – Phase Two;
- 1 slot-pair for service to San José, US – Phase Two;
- 1 slot for service to Ontario International – Phase Two;
- 1 slot for service to Chicago O'Hare – Phase Two;
- 1 slot for service to Oakland International – Phase Two.
-VivaAerobus (Monterrey Mariano Escobedo):
- 1 slot-pair for service to Las Vegas Harry Reid – Phase One;
- 2 slot-pairs for service to New York JFK – Phase Two.
At New York JFK:
- 1 slot-pair for service to México City International – Phase One.
-Volaris:
- 1 slot-pair for service to México City International – Phase One.
-VivaAerobus:
- 2 slot-pairs for service to México City International – Phase Two.
Objections to the order are due by March 13 following which a Final Order will be issued.
As noted earlier this week, Mexico's Anti-Monopolies Commission (Comisión Federal de Competencia Económica - COFECE) remedy to allocate eight México City slot pairings to jetBlue (three), Alaska Airlines (two), Volaris (two), and VivaAerobus (one) is covered by the DOT's decision.
