Election Fever Hampers Viva Aerobus and Allegiant Air Partnership: A Deep Dive into the DOT's Suspension of Review

The ongoing election season in the United States has cast a shadow over the proposed joint venture between Viva Aerobus and Allegiant Air, as the Department of Transportation (DOT) has suspended its review of the partnership. The DOT's decision comes in the wake of the Mexican Government's actions at Mexico City International Airport (MEX), which has led the DOT to question the implementation of a liberalized air transport agreement between the two countries. Juan Carlos Zuazua, the CEO of Viva Aerobus, has attributed the delay in the final decision to the political climate of the election season. However, he remains hopeful that the US government will approve the partnership soon. In December 2021, Allegiant Air and Viva Aerobus announced their partnership, stating that the alliance would bring new competition and service options to the US-Mexico market. The pair submitted a 77-page document to the DOT, arguing that the alliance agreement would bring new competition and service options to the US-Mexico market.

However, on July 31, 2023, the DOT published a document suspending the review of the two airlines' request for approval and antitrust immunity (ATI) for their alliance. The DOT cited the Mexican government's actions at MEX, which have resulted in the DOT questioning the predicate of the implementation of a liberalized air transport agreement between the two countries. The DOT has also dismissed Delta Air Lines and Aeromexico's application to renew their joint venture's ATI, citing the same reasons. The Mexican government has ordered all-cargo operations to move from MEX to Mexico City Felipe Ángeles International Airport (NLU), and capacity at MEX has been reduced in the past three International Air Transport Association (IATA) seasons, increasing difficulties for new entrants to enter MEX. Allegiant Air and Viva Aerobus have asked the DOT to reinstate their review of their joint application, arguing that no other ATI has taken so long to review. The two carriers added that the approval of their joint venture would likely be the 'most significant procompetitive decision DOT could make could make today.'

Actions