VivaAerobus and Allegiant Air Seek Reinstatement of ATI Application Review by US DOT

VivaAerobus and Allegiant Air are eager for the US Department of Transportation (DOT) to resume its examination of their Antitrust Immunity (ATI) application, following a potential reversal of the DOT’s decision to terminate Delta Air Lines and Aeroméxico’s joint cooperation agreement’s existing ATI. The application review was put on hold in August 2023 due to concerns raised by the DOT regarding the Mexican government’s adherence to the US-Mexico air services agreement, particularly actions such as relocating all cargo flights from México City International to México City Felipe Angeles and reducing capacity at MEX for three consecutive times.

In response to the DOT’s tentative dismissal of Delta and Aeroméxico’s application to renew their ATI in January, both Delta-Aeroméxico and VivaAerobus-Allegiant filed objections. VivaAerobus and Allegiant argued that the issues highlighted by the DOT, focused on a single airport, should not materially impact US airlines’ access to Mexico or hinder the proposed partnership’s potential for introducing new and impactful market entries.

The airlines have suggested that disagreements over Mexican authorities’ actions should be resolved through diplomatic channels and available dispute resolution mechanisms, rather than impeding their joint venture plans. They expressed concerns that a “holding pattern” in both their case and Delta-Aeroméxico’s would unfairly benefit the existing alliance while blocking the proposed VivaAerobus-Allegiant partnership.

Proposed in late 2021, the joint venture between VivaAerobus and Allegiant Air aims to significantly expand nonstop leisure routes between the US and Mexico, including a USD50 million equity investment by Allegiant Air in VivaAerobus. The partners have identified over 250 potential new route opportunities, planning to launch 92 new routes within the first two years of their partnership.

VivaAerobus’s fleet, according to the ch-aviation fleets module, includes a variety of Airbus aircraft, totaling 81, with an additional fourteen A320-200s wet-leased from Avion Express Malta due to ongoing engine issues. Allegiant Air operates a fleet of 130 aircraft, comprising thirty-five A319-100s and ninety-five A320-200s. This ambitious joint venture underscores the airlines’ commitment to enhancing connectivity and leisure travel options between the two countries, pending regulatory approval and resolution of the current impasse with the US DOT.