United Airlines wants the Mexico City slots JetBlue is giving up
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The Star Alliance carrier wants to launch a third daily flight between its San Francisco (SFO) hub and Mexico City (MEX) with an Airbus A319, it said in an application to the U.S. Department of Transportation on Friday. The flight, United argues, is possible with some of the slots that JetBlue will return in January as that carrier ends flights at the constrained Mexican airport.
United added that it has repeatedly sought the slots necessary for the new flight from Mexican authorities to no avail.
The airline is appealing to U.S. authorities in what would normally be a matter for Mexican regulators under a 2016 decision approving a partnership between Delta Air Lines and Aeromexico. The tie-up, or “joint venture” that allows the two SkyTeam Alliance members to operate as essentially one between Mexico and the U.S., was conditioned on Delta and Aeromexico divesting 48 slots at the Mexico City airport.
The DOT allocated those slots to Mexican and U.S. carriers that either did not fly between Mexico City and the U.S., or lacked a sizable operation. In other words, the regulator excluded incumbents like American Airlines and United Airlines in the name of creating new competition.
In aviation vernacular, “slots” represent flight rights needed to operate at certain capacity controlled airports. One slot allows a takeoff or landing, meaning two are needed for a round-trip flight.
In 2016, American and United respectively carried 15.4% and 15.2% of the 7.3 million passengers between Mexico City and the U.S., according to DOT data via Cirium. JetBlue and Southwest Airlines served Mexico City but only had a 2.5% and 3% share of passengers, respectively.
Fast forward three years and the DOT’s aims have not gone as planned. Alaska Airlines, JetBlue and Southwest, plus a number of Mexican carriers, were awarded the slots with plans for an array of new routes. However, all three U.S. carriers have since exited Mexico City altogether — Alaska in November 2018, Southwest in March, and JetBlue this January.
The moves have come amid weak U.S.-Mexico demand. Aeromexico has ended service between Mexico City and Boston (BOS), Portland (PDX) in Oregon, and Washington Dulles (IAD) since last December, even with the Delta partnership.
Enter United, which sees an opportunity in the failure of the DOT’s push to open Mexico City to new carriers.
“Conditions have changed and the public interest requires a fresh look at, and a reconsideration of, United’s eligibility,” United said in its application. “Rather than allow the slot pairs to go unused or be returned to Delta/Aeromexico, the [DOT] should award United the divested slot pair… which will enhance competition and provide significant consumer benefits.”
United has seen its share of Mexico City-U.S. passengers fall to 13.4% of the 8.3 million in 2018 — a nearly two point decline since 2016 — DOT data shows. American has seen a three-point decline to 12.3%, while Aeromexico and Delta saw their combined share decline by six points to 40%.
Whether the DOT will be swayed by United’s argument remains to be seen. The mainline carrier has a point that awarding it slots would create more competition, and likely do more for consumers, than leaving them unused or returning them to Aeromexico and Delta. However, other incumbents like American may argue that if the regulator grants United’s request, it needs to consider others as well.
In addition to its San Francisco flights, United serves Chicago O’Hare (ORD), Houston Intercontinental (IAH), Newark (EWR) and Washington Dulles from Mexico City, according to Cirium schedules.
Featured image by Robert Alexander/Getty Images.
Related: The ultimate guide to United Polaris
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