The US Department of Transportation has suspended the review of the joint venture application between Allegiant Air and Viva Aerobus, citing outstanding questions about the implementation of the US-Mexico air transportation agreement. Allegiant and Viva proposed the joint venture initially in 2021.
Their partnership requires approval from the Mexican Federal Economic Competition Commission (COFECE) and the US Department of Transportation (US-DOT).
In a letter dated July 31, 2023, Carol Petsonk, the Assistant Secretary for Aviation and International Affairs at the DOT, said that the agency suspended its review of the application by Allegiant Air and Viva Aerobus for antitrust immunity from the DOT.
“I wanted to let you know that we must suspend the procedural schedule established by Notice on January 12, 2023, for our review of the application by Allegiant Air, and Viva Aerobus for antitrust immunity from the US Department of Transportation filed on December 1, 2021.”
The letter further emphasized that for the DOT to give antitrust immunity, there has to be a ‘de jure and de facto implementation of a fully liberalized air transport agreement’, meaning recent actions from the Mexican government, which have impacted US carriers’ operations at Mexico City International Airport, have called into question the implementation of a fully liberalized air transport agreement between both countries.
“Given these circumstances, we are not able to further consider the Viva/Allegiant case pending additional information demonstrating compliance with, and full implementation of, the terms of the US-Mexico air transportation agreement through our continued consultations with SICT,” the DOT added.
Meanwhile, Allegiant Air hopes the United States and Mexico can quickly resolve their differences over the bilateral agreement, so travelers from both countries can benefit from the Allegiant/Viva joint venture.
In a separate notice, Petsonk added that the DOT is working with the Government of Mexico to resolve significant concerns.