Delta–Aeromexico Pact May Be Stifling Competition, DoJ Supports Ending Immunity: Report

The U.S. Department of Justice has backed revoking the Antitrust Immunity for an alliance between Delta Air Lines Inc. DAL and Grupo Aeromexico.

Department of Transportation Proposes Revoking The Immunity

The DoJ backed a proposal filed by the Department of Transportation, which seeks to revoke the immunity of the joint venture, Reuters reported on Monday.

The venture allows the two airlines to coordinate on pricing, scheduling and other decisions between U.S.-Mexico flights.

"Competition is particularly valuable in the airline industry. It drives lower prices, better quality, and more of the services consumers want," the DoJ said in the filing, adding that the alliance may be stifling competition, the report suggests.

Delta's AI-Powered Pricing

The news comes as Delta had announced recently that it would use AI to provide personalized pricing for its customers. The company said 3% of the fares would be determined by AI, with plans to scale that up to 20% in the future.

However, the decision has faced backlash from lawmakers, with senators warning that such a decision could exploit travelers with fare hikes and has also raised privacy concerns.

"Consumers have no way of knowing what data and personal information your company and Fetcherr plan to collect or how the AI algorithm will be trained," the senators said in a letter criticizing the decision.

Delta's Multi-Million Dollar Settlement

The news also comes as Delta has reportedly settled a probe by the Justice Department, agreeing to pay an $8.1 million fine for allegedly misusing the federal COVID-19-19 pandemic relief funds.

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