Mexico competition watchdog approves Aeromexico-Delta joint venture

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MEXICO CITY (Reuters) - Mexico’s federal competition commission approved Aeromexico’s $1.5 billion joint venture with Delta Airlines with certain conditions, Aeromexico said in a filing on Monday.

Grupo Aeromexico SAB de CV and Delta Airlines Inc are seeking a broad alliance and had asked the commission, known as Cofece, for antitrust immunity in order to coordinate prices, capacity and schedules. The two carriers are still awaiting U.S. government approval.

The tie-up ultimately will strengthen the airlines’ position in the world’s second-largest cross-border market, helping them vie for U.S. vacationers, business executives and travelers visiting friends and family in either country.

One of Cofece’s conditions is that eight pairs of slots in the Mexico City airport must be given up, Aeromexico said in a filing to Mexico’s stock exchange.

Asked about the slots, a spokesman for Aeromexico said the company did not have more information.

Cofece said Delta and Aeromexico would not be able to keep assigned routes where they coincide, and that one of the two would have to give them up.

A spokeswoman for Delta said the company could not comment on Cofece’s approval until the government review process formally concludes.

Mexico’s Senate last week approved an air transport deal with the United States that was a prerequisite to the Aeromexico and Delta joint venture. The agreement will allow airlines to open new routes between the two countries and will permit an unlimited number of flights.

Reporting by Cyntia Barrera and Veronica Gomez in Mexico City and Jeffrey Dastin in New York; Editing by Bernard Orr and Dan Grebler