The US Department of Transportation (DOT) has issued a Final Order concerning the reallocation of 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) 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.
In its filing issued on Monday, April 10, the DOT said that virtually all interested parties, with the exception of Interjet (AIJ, Toluca), had supported the approach it had taken in its Show Cause Order published last month. However, the DOT said Interjet's objections to it being excluded from obtaining Mexico City remedy slots were not persuasive, and, accordingly, were rejected after additional consideration.
As previously reported, the reallocation proceedings were 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 AeroMéxico/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 Final Order published this week, the DOT awarded the following carriers the following slots at the following cities (note revisions):
-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 (VB, 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;
- 1 slot-pair for service to Cancún – Phase Two (New from Show Cause).
-VivaAerobus:
- 3 slot-pairs for service to México City International – Phase Two (Revised from Show Cause).
Concerning revisions to the Show Cause order, the DOT said that as both of VivaAerobus’ original Phase Two requests required slots during JFK's protected hours, it had been directed to submit a revised request, seeking slot-times at JFK that fall outside of protected hours. VivaAerobus complied and submitted a request for JFK arrival/departure slots at 13h25L/14h55L and 05h00L/09h00L.
"By selecting VivaAerobus’ revised JFK slot-times, the Department is able to accommodate Volaris’ original JFK-Cancún request," the Department said. "VivaAerobus’ revised slot-times require only three slots for its operations, as its requested 05h00L arrival at JFK is outside of the airport’s slot-controlled hours. Likewise, Volaris requested JFK slots at 07h00L and 23h00L for its proposed Cancún service. 23h00L is also outside of the slot-controlled hours at JFK. Therefore, Volaris requires only one slot (at 07h00L) to operate the service. As there are no other competing requests for the available JFK slots, the Department will assign the remaining JFK slot made available by VivaAerobus’ revised request to Volaris for service to Cancún."
The DOT also notes that even though the Antitrust Immunity (ATI) granted to AeroMéxico and Delta through this proceeding is valid for five years, it reserves the right to reopen the case should the circumstances warrant it. 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 also covered by the DOT's decision.