The US Department of Transportation (DOT) has paused its review of the joint venture (JV) application between VivaAerobus (Monterrey Mariano Escobedo) and Allegiant Air (G4, Las Vegas Harry Reid), saying it has concerns about how the Mexican government is implementing the US-Mexico air transportation agreement.
The two ultra-low-cost carriers first flagged their proposed 15-year JV in late 2021. However, it needed approval from both the Mexican antitrust regulator (COFECE) and the DOT. At the time, Allegiant Air said the JV would "dramatically expand" nonstop leisure routes between the two nations and involved Allegiant making a USD50 million equity investment in VivaAerobus. The initial application said there would be coordination across multiple areas of airline operations - including code-sharing, scheduling, marketing, information systems and loyalty programs. In October 2022, COFECE unconditionally approved the JV.
In January 2023, the DOT said it had completed its initial review of the JV and would commence a procedural schedule for public comments. On July 31, Carol A. Petsonk, Assistant Secretary for Aviation and International Affairs at the DOT, formally suspended the procedural review. In a letter to Rogelio Jimenez Pons, Mexico's Undersecretary of Transport, she wrote, "I wanted to let you know that we must suspend the procedural schedule established by Notice on January 12, 2023, for our review of the application by Allegiant Air and Viva Aerobus for antitrust immunity from the US Department of Transportation filed on December 1, 2021.”
Petsonk said for the DOT to approve JVs such as this, there has to be "the de jure and de facto implementation" of the liberalised US-Mexico air transportation agreement. She suggested the Mexican government's recent actions, restricting US-based carriers' access to México City International, ran counter to this. "Given these circumstances, we are not able to further consider the Viva/Allegiant case pending additional information demonstrating compliance with, and full implementation of, the terms of the US - Mexico air transportation agreement through our continued consultations with SICT (Secretariat of Infrastructure, Communications, and Transportation)," Petsonk wrote.
Viva Aerobus operates an all-Airbus fleet of 75 narrowbodies, including twenty-two A320-200s, twenty-two A320-200Ns, nine A321-200s, and twenty-two A321-200NX. It flies to 54 destinations in five countries, including the US airports of Chicago O'Hare, Houston Intercontinental, Las Vegas Harry Reid, Los Angeles International, New York JFK, San Antonio International, Dallas/Fort Worth, Charlotte International, Cincinnati International, and Nashville International. Allegiant Air is also an Airbus airline. It operates thirty-five A319-100s and ninety-four A320-200s to 124 destinations around the US. It does not presently fly into Mexico. However, the JV would see Allegiant enter markets such as Cancún, Chehalis Centralia, and Puerto Vallarta.
While not setting a firm timeline, Petsonk told her Mexican counterpart that "we will resume our review of the application once we can confirm compliance with, and full implementation of, the terms of the US-Mexico air transportation agreement."
“We hope the United States and Mexico can resolve their differences over the bilateral agreement quickly, so travelers from both countries can benefit from the Allegiant/Viva joint venture," a spokesperson for VivaAerobus told ch-aviation.
