Eleventh Circuit vacates DOT order terminating the Delta–Aeroméxico joint venture’s approval and antitrust immunity

Key takeaways

• On August 20, 2026, the United States Court of Appeals for the Eleventh Circuit vacated the Department of Transportation (DOT)’s September 2025 final order terminating approval of, and withdrawing antitrust immunity (ATI) from, the Delta Air Lines–Aeroméxico joint venture.
  
  
• DOT departed, without reasonable explanation, from its uniform practice of analyzing joint ventures at the network, country-pair, and city-pair levels; the final order rested entirely on conditions at Mexico City’s Benito Juárez International Airport (MEX), which accounts for a 21 percent share of US–Mexico flights.
  
  
• DOT also failed to treat comparable cases alike: It made Mexico’s compliance with the US–Mexico open skies agreement a “necessary” condition of maintaining ATI, even though it approved and immunized two US–Japan joint ventures at Tokyo’s Haneda Airport, which is carved out of the US–Japan open skies agreement.
  
  
• The statutory standard for initial and continuing approval under 49 U.S.C. § 41309(b) remains in place, so the termination posture did not itself justify a narrower analysis – although US Circuit Judge Robin Rosenbaum, concurring in the judgment, disagreed on that point and joined only the open skies holding.
  
  
• The joint venture’s approval and immunity remain in effect. The court did not decide whether the venture merits continued ATI, and DOT may seek further review or issue a new order supported by its established analytical framework.

In Delta Air Lines, Inc. v. US Department of Transportation, the Eleventh Circuit granted the petition for review filed by Delta Air Lines, Inc. and Aerovias de México, SA de CV (Aeroméxico) and vacated, as arbitrary and capricious, DOT’s final order terminating its 2016 approval of – and grant of antitrust immunity for – the carriers’ US–Mexico joint venture.[1]

All three judges agreed the order could not stand, although they divided over the reasoning. This alert traces the case – from the joint venture’s approval through the termination proceedings and the court’s decision – and provides practical implications for immunized alliances.

Background

The statutory framework: US carriers may apply to DOT for approval of cooperative agreements – including joint ventures – with foreign air carriers, and DOT will approve an agreement it determines is not adverse to the public interest.

Alongside approval, DOT may exempt the parties from the antitrust laws to the extent necessary to proceed with the approved transaction. DOT must disapprove – and after periodic review may end approval of – an agreement that “substantially reduces or eliminates competition,” unless 1) the agreement is necessary to meet “a serious transportation need” or to achieve important public benefits, and 2) the need cannot be met, or the benefits achieved, “by reasonably available alternatives that are materially less anticompetitive.”[2]

Open skies and slots: Since 1992, DOT has defined “open skies” agreements by reference to basic elements that include “[o]pen entry on all routes,” “[u]nrestricted capacity and frequency on all routes,” and “[u]nrestricted route and traffic rights.” The US and Mexico entered into an open skies agreement in 2015. Even under open skies, extremely congested airports manage traffic through “slots” – authorizations to take off or land at a particular airport on a particular day during a specified time period.[3]

The 2016 approval: Delta and Aeroméxico applied in March 2015 for approval of, and antitrust immunity for, a “metal neutral” joint venture – one in which the partners share revenue regardless of which carrier flies the passenger – covering all of their nonstop US–Mexico routes and behind- and beyond-gateway connecting flights. The carriers predicted increased traffic on 22 routes, eight of them by 20 percent or more.

In a November 2016 show-cause order, DOT tentatively approved the venture after a comprehensive competitive analysis of the US–Mexico “country-pair” market and the 1,687 US–Mexico “city-pair” markets, including a “share shift” analysis predicting which city-pairs would see fewer competitors.

DOT concluded that the venture would increase the number of viable competitors in 15 markets, while reducing the number of competitors only in small markets accounting for less than one percent of all US–Mexico passengers. One concern stood out: the Mexican government’s “non-transparent slot allocation regime” at MEX, where the venture would control almost half of the slots. DOT therefore conditioned approval on divestiture of 24 slot-pairs at MEX and limited the grant of immunity to five years; it made the approval and grant of immunity final on December 14, 2016. The carriers complied and began operating the joint venture.[4]

From approval to termination

The renewal application: In March 2022, the carriers applied to renew the venture’s approval and immunity, reporting that the joint venture had increased US–Mexico flight capacity by 761 seats per day, significantly expanded capacity on 26 city-pair routes, and launched entirely new service on six routes. DOT extended the existing approval and immunity while the renewal application was pending.[5]

The show-cause orders: In January 2024, DOT issued a show-cause order proposing to terminate the venture’s approval and immunity and tentatively dismissing the renewal application without prejudice. DOT asserted that recent Mexican government actions at MEX were inconsistent with the open skies agreement and that, under longstanding DOT policy, “de facto or de jure implementation” of an open skies agreement is a “necessary precondition” for a joint venture’s antitrust immunity.

The carriers objected on multiple grounds, including that DOT had applied a more stringent standard than it applied to other joint ventures and had ignored reasonable alternatives to termination. In July 2025, DOT issued a supplemental show-cause order centered on “changed circumstances.” In DOT’s account, the Mexican government began breaching the open skies agreement in 2022 when it “arbitrarily reduced capacity” at MEX and “confiscated slots from U.S. carriers at MEX,” and again in 2023 when it “ordered all-cargo carriers to vacate MEX.”

The venture’s “dominant slot holdings and favored positioning at MEX” then allowed the carriers to announce new US–MEX routes while other carriers cut capacity. The venture gained an advantage from the all-cargo ban, given its ability to carry belly cargo on passenger flights; the carriers moved 73 percent of belly cargo between the US and MEX in 2022–2023.

Objecting again, the carriers submitted their own market analysis and predicted that termination would risk eliminating nonstop service on 21 city-pair routes.[6]

The final order: On September 15, 2025, after fielding comments from interested parties, DOT issued a final order terminating approval of the joint venture and withdrawing its antitrust immunity, effective January 1, 2026.

The order rested on four competitive concerns, each tied to MEX:

• The carriers’ predominant share at MEX
  
  
• The risk that the Mexican government “could act in a similar manner at other congested gateways such as Cancun”
  
  
• The venture’s ability, given regulatory conditions at MEX and its immunity, to “achieve better outcomes than would be possible for other carriers”
  
  
• The venture’s ability to “coordinate cargo operations to, from, and via MEX” notwithstanding the all-cargo ban

Unlike DOT’s 2016 analysis, the final order contained no updated country-pair figures, no prediction of how the competitive landscape would evolve if the venture continued, and no city-pair share shift analysis.

The carriers petitioned the Eleventh Circuit for review in October 2025, and on November 12, 2025 – before the termination took effect – the court stayed the final order pending its decision.[7]

The Eleventh Circuit’s decision

Writing for the panel, US Circuit Judge Elizabeth Branch applied the Administrative Procedure Act’s deferential arbitrary-and-capricious standard, under which agency action must be reasonable and reasonably explained, and held that the final order failed on two grounds, each directed at DOT’s method of analysis.[8]

An unexplained departure from uniform precedent: When evaluating airline joint ventures under 49 U.S.C. §§ 41308 and 41309, DOT’s uniform practice has been to consider both pro- and anti-competitive effects of a venture across various markets, including at the network, country-pair, and city-pair levels. This approach is reflected in DOT orders dating to the KLM–Northwest alliance in 1993, and is one DOT has explicitly refused to abandon when parties urged narrower analyses.[9]

The 2025 final order, by contrast, analyzed none of the 1,687 city-pairs in the US–Mexico market, conducted no country-pair analysis, and rested on competitive concerns at a single airport. The court rejected DOT’s two attempts to square that approach with precedent. That the final order addressed a termination rather than an initial approval did not support DOT’s ruling, because “[t]he statutory standard DOT must apply for initial approval and continuing approval of joint ventures is the same.” Nor could DOT lean on its original review, which was conducted nine years before it issued the final order.

DOT never explained why its 2016 conclusions remained accurate or why conditions at MEX – “only a 21% share of U.S.-Mexico flights” – were “severe enough to warrant ignoring the broader market.”[10]

An open skies precondition not applied to like cases: The final order stated that “[a]n Open Skies regulatory framework is necessary under the competition and public interest analysis required by Sections 41309 and 41308 but not sufficient to obtain approval of and maintain a grant of [antitrust immunity].”[11] DOT acknowledged that no such preliminary test appears in the statute, but argued that it serves as a framework for the required public interest and competition analysis.

The issue, the court held, was one of consistency: DOT has approved, and granted immunity to, two joint ventures between US and Japanese carriers operating at Tokyo’s Haneda Airport, even though the 2009 US–Japan open skies agreement carved Haneda out by prohibiting all-cargo service and Japan later limited US carriers to 18 daily slot-pairs at the airport.[12]

DOT did not contest that it held Delta and Aeroméxico to a higher standard than the Japanese joint venture applicants. It argued instead that only Mexico “is unacceptably distorting competition,” while the US and Japan “productively collaborated” on aviation issues.

The court found the response invalid: Even accepting the diplomatic differences, “DOT made open skies a necessary step for approval of this joint venture while it was not necessary for the two similar joint ventures in Japan.”[13]

The concurrence: Judge Rosenbaum concurred in the judgment on the open skies ground alone. DOT conceded at oral argument that Haneda “enjoys a carveout” from the US–Japan open skies agreement; the airport, DOT explained, is transitioning to a fully open skies framework. In her view, such a concession shows that strict compliance with an open skies agreement is not in fact necessary, but rather, strongly preferred. Therefore, DOT could not treat noncompliance at MEX as, in and of itself, a sufficient basis to withdraw approval.

Judge Rosenbaum, however, rejected the majority’s departure-from-precedent holding. Initial approvals and withdrawals of existing approvals, she reasoned, “are not both apples.” When DOT withdraws approval of a venture it has already fully analyzed and continues to monitor, it may permissibly focus on the specific problems it identified at the outset, consistent with its discretion to decide “how much data is necessary to fully address each issue.”[14]

What the decision does not do

The court did not decide whether the joint venture should retain its approval or immunity – only that DOT’s stated reasoning could not sustain the termination. The panel did not reach the carriers’ remaining arguments that the final order relied on speculation and unsupported facts, was internally inconsistent, and failed to reasonably consider alternative actions. The case also did not present any question under Loper Bright Enterprises v. Raimondo because the carriers did not challenge DOT’s interpretation of the statute.[15]

The decision likewise leaves the underlying US–Mexico aviation dispute unresolved: DOT’s stated concerns about slot administration and the all-cargo prohibition at MEX remain ongoing regulatory and diplomatic issues. As a practical matter, because the court stayed the final order before its January 1, 2026 effective date, and has now vacated it, the joint venture’s approval and antitrust immunity remain in effect.

DOT’s potential paths forward include seeking panel rehearing, rehearing en banc, US Supreme Court review, or issuing a new order supported by the comprehensive market analysis its precedent requires.

Implications for immunized alliances

Carriers that participate in or are weighing immunized alliances may consider the following three points:

Renewals and terminations are measured against the same yardstick as grants. The panel majority held that the Section 41309(b) standard does not change between initial and continuing approval, and that DOT cannot narrow its review to a single airport – or to a bilateral aviation dispute – without explaining why the broader market no longer matters. Alliance partners can expect renewal and show-cause proceedings to be tested against DOT’s full country-pair and city-pair framework, and are encouraged to build renewal records accordingly.

Preconditions must be applied evenhandedly. The ground that united all three judges is equal treatment: DOT may not impose an open skies compliance prerequisite on one venture while immunizing comparable ventures at carved-out airports, such as Haneda. That holding supplies a benchmark – DOT’s treatment of prior alliances – wherever DOT conditions such as slot divestitures, carve-outs, or open skies expectations are negotiated.

The concurrence preserves a narrower path for DOT. Judge Rosenbaum’s separate opinion would allow DOT, in a withdrawal proceeding, to focus on the specific concerns it flagged at approval and has monitored since. The 2–1 split on the departure-from-precedent ground leaves DOT room to press that theory in future cases – providing venture partners a reason to treat the conditions attached to an initial approval as the likely battleground of any later review.

For more information

DLA Piper’s Transportation practice advises US and foreign carriers on DOT alliance approvals, antitrust immunity proceedings, and international aviation disputes. For more information, please contact the authors.

 

^{[1] Delta Air Lines, Inc. v. U.S. Dep’t of Transp., No. 25-13546, slip op. (11th Cir. Aug. 20, 2026) [hereinafter Slip Op.], available at https://media.ca11.uscourts.gov/opinions/pub/files/202513546.pdf. The underlying agency proceeding is DOT Docket No. DOT-OST-2015-0070, https://www.regulations.gov/docket/DOT-OST-2015-0070.}

^{[2] 49 U.S.C. § 41309, https://www.law.cornell.edu/uscode/text/49/41309; 49 U.S.C. § 41308(b), https://www.law.cornell.edu/uscode/text/49/41308; see Slip Op. at 4–5.}

^{[3] Defining Open Skies, DOT Order 92-8-13, 1992 WL 204010, at *1, *5 (Aug. 5, 1992); Air Transport Agreement Between the Government of the United States of America and the Government of the United Mexican States, U.S.-Mex., Dec. 18, 2015; Slot Administration – Slot Definition, Fed. Aviation Admin., https://www.faa.gov/about/office_org/headquarters_offices/ato/service_units/systemops/perf_analysis/slot_administration/slot_definition; see Slip Op. at 3–4.}

^{[4] Slip Op. at 5–7; Delta Air Lines, Inc., Order 2016-11-2 (Order to Show Cause) (Nov. 4, 2016), https://downloads.regulations.gov/DOT-OST-2015-0070-0074/attachment_1.pdf; Delta Air Lines, Inc., Final Order 2016-12-13, at 1 (Dec. 14, 2016) (also requiring, among other conditions, divestiture of four slot-pairs at New York’s John F. Kennedy International Airport), https://downloads.regulations.gov/DOT-OST-2015-0070-0096/attachment_1.pdf.}

^{[5] Id. at 7.}

^{[6] Id. at 7–10 & nn.4–5; see Delta Air Lines, Inc., Order 2024-1-17, at 1 (Order to Show Cause) (Jan. 26, 2024), https://downloads.regulations.gov/DOT-OST-2015-0070-0245/attachment_1.pdf; Delta Air Lines, Inc., Order 2025-7-12 (Supplemental Order to Show Cause) (July 19, 2025), https://downloads.regulations.gov/DOT-OST-2015-0070-0333/attachment_1.pdf.}

^{[7] Id. at 10–12 & nn.6–7; Delta Air Lines, Inc., Final Order 2025-9-8, at 1 (Sept. 15, 2025) (terminating approval and withdrawing immunity effective January 1, 2026), https://downloads.regulations.gov/DOT-OST-2015-0070-0354/attachment_1.pdf; Order, Delta Air Lines, Inc. v. U.S. Dep’t of Transp., No. 25-13546 (11th Cir. Nov. 12, 2025) (granting stay) (docket available at https://www.courtlistener.com/docket/71612289/delta-air-lines-v-us-department-of-transportation/); see also Slip Op., Rosenbaum, J., concurring in the judgment, at 1.}

^{[8] 5 U.S.C. § 706(2); FCC v. Prometheus Radio Project, 592 U.S. 414, 423 (2021); see Slip Op. at 12–14.}

^{[9] Am. Airlines, Inc., DOT Order 2010-7-8, at 9 (July 20, 2010); Northwest Airlines, Inc., DOT Order 93-1-11, at 9–10 (Jan. 11, 1993); see Slip Op. at 15–16.}

^{[10] Slip Op. at 16–18.}

^{[11] Id. at 19 (quoting the final order; emphasis omitted).}

^{[12] Id. at 19–20; Air Transport Agreement, Memorandum of Understanding, Annex § 3, U.S.-Japan, Dec. 14, 2009; U.S.-Japan All., DOT Order 2010-11-10, at 1 (Nov. 10, 2010); Delta Air Lines, Inc., DOT Order 2023-6-24, at 1 (June 30, 2023).}

^{[13] Slip Op. at 20–21.}

^{[14] Slip Op., Rosenbaum, J., concurring in the judgment, at 1–5.}

^{[15] Slip Op. at 13 n.8; id. at 5 n.1 (citing Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024)).}