The US Department of Transportation (DOT) has formally instituted a Slot Assignment Proceeding to allocate slots at New York JFK and México City which Delta Air Lines (DL, Atlanta Hartsfield Jackson) and AeroMéxico (AM, México City) agreed to relinquish as part of the antitrust immunity conditions laid down for their joint venture.

In a series of rulings published late last year, the DOT required both carriers to divest a total of twenty-four México City and four New York JFK slot pairs to offset its concerns about any possible anti-competitive impact the partnership may have in the New York JFK and Mexico City markets. In order to mitigate the financial impact on the airlines, of the four New York JFK slots, only two must be divested during JFK's peak-hours between 1500L-2059L.

The DOT also noted that compliance with its remedy will coincide with that laid down by Mexico's Anti-Monopolies Commission (Comisión Federal de Competencia Económica - COFECE) wherein Delta and AeroMexico have been required to divest only eight Mexico City slots.

As such, carriers eligible for the freed up slots at Mexico City include: 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 include: Alaska Airlines, Southwest, Frontier, Sun Country, Virgin America, Allegiant, Spirit, Hawaiian, Interjet, Volaris, and VivaAerobus.

In an order requesting proposals from the eligible carriers to utilize the divested slots, the DOT said it would be conducting the exercise in two phases.

The first phase entails the reallocation of fourteen Mexico City slot pairs and two at JFK to applicants of the DOT's choosing while the second entails the reallocation of the remaining ten Mexico City and two JFK slots under slightly different circumstances.

In the second phase, the slots will only be awarded to airlines that have demonstrated to the DOT that they have exhausted reasonable efforts to acquire the slots themselves through each airports’ normal allocation process before Delta and AeroMéxico will be required to transfer them. This phase must be completed in time for the slots to be transferred for use during the IATA Northern Summer 2018 scheduling season.

"In selecting among the proposals, the Department will consider which applicant or applicants will be most likely to offer and maintain service that will best meet the objective of the divestiture. This will include introducing competition and price discipline in the U.S.-MEX and JFK-MEX markets," it said.

Applicant's proposals will also be scrutinized for their network benefits including behind/beyond connections, as well as service to communities without existing nonstop service to either slot-controlled airport. Additionally, the proposal's ability to enhance the quality of competition, such as by offering additional frequencies in major markets or introducing the benefits of new business models, will be looked at.

Proposals are due by January 23, 2017 with a final decision due by May 17, 2017.