Allegiant Air and Viva Aerobus Joint Venture Review Suspended Amid Mexico City Airport Actions

The United States Department of Transportation (DOT) has announced the suspension of its review concerning the proposed joint venture (JV) between Allegiant Air and Viva Aerobus. This move is attributed to recent actions by the Mexican government at Mexico City Benito Juarez International Airport (MEX).

Carol Petsonk, Assistant Secretary for Aviation and International Affairs at the DOT, conveyed this development through a letter dated July 31, 2023. The suspension pertains to the review of the application for antitrust immunity submitted by Allegiant Air and Viva Aerobus to the DOT.

Petsonk explained that the DOT’s decision to halt the review stems from unresolved issues surrounding the ongoing implementation of the U.S.-Mexico air transportation agreement. The criteria for granting antitrust immunity demand a comprehensive realization of a fully liberalized air transport accord.

The DOT’s stance is influenced by recent actions by the Mexican government impacting U.S. carrier operations at Benito Juarez International Airport. As a result, the DOT has temporarily suspended the case of the low-cost carriers until further information validates compliance with the U.S.-Mexico air transportation agreement. This assessment will be conducted through continued consultations with the Secretariat of Infrastructure, Communications, and Transportation (SICT), the Mexican government entity responsible for the country’s transport and communications networks.

While the DOT acknowledges its ongoing collaboration with the Mexican government to address concerns, the recent move by Mexico to relocate cargo airline operations from MEX to Felipe Angeles International Airport (NLU) has raised questions.

This cargo operation transition, proposed by SICT Secretary Jorge Nuño Lara, aims to provide long-term benefits for the sector. The inaugural cargo flight at NLU took place on July 7, 2023. The first aircraft to land was an Estafeta Carga Aerea Boeing 737-400BDSF, which was subsequently expected to operate flights to and from NLU starting August 14, 2023.

The transition is intended to offer cargo operators direct entry to tax precincts, strategic proximity to logistics developments, and future expansion capacity—resulting in potential savings in time and operating costs compared to MEX. While the deadline for moving cargo operations from MEX to NLU was extended to September 1, 2023, concerns about potential negative impacts on Mexico’s cargo connectivity have been raised by the International Air Transport Association (IATA).

Allegiant Air and Viva Aerobus had previously announced a unique commercial alliance agreement aimed at enhancing nonstop leisure air travel between the U.S. and Mexico. However, the timeline for this collaboration has been disrupted due to the suspension of the JV review by the DOT.