DL and Aeromexico file ATI/JV application
- Thread starter WorldTraveler
- Start date
OP
- Dec 5, 2003
- 21,709
- 10,721
- Thread Starter
- #47
^^^^ this ^^^^
problem is it isn't their own people and airlines they are screwing around with.
It is the one of the largest air travel markets from the US - and Mexico DOES have the right to say they will rewrite things to their liking until they get what they want - or they return to the "good ole days" where the aviation market is controlled by a few carriers.
but let's face it: that is exactly what AA and UA want.... to protect themselves from the onslaught of competition that is coming from both legacy carriers (AM and DL) and LCCs.
so, yeah, AM and the Mexican gov't can play this game too.
and it won't turn out well for AA or UA either.
and of course B6 and WN will be fuming as long as they are forced to sit on the sidelines.
Another epic screw up by the US government.
problem is it isn't their own people and airlines they are screwing around with.
It is the one of the largest air travel markets from the US - and Mexico DOES have the right to say they will rewrite things to their liking until they get what they want - or they return to the "good ole days" where the aviation market is controlled by a few carriers.
but let's face it: that is exactly what AA and UA want.... to protect themselves from the onslaught of competition that is coming from both legacy carriers (AM and DL) and LCCs.
so, yeah, AM and the Mexican gov't can play this game too.
and it won't turn out well for AA or UA either.
and of course B6 and WN will be fuming as long as they are forced to sit on the sidelines.
Another epic screw up by the US government.
OP
- Dec 5, 2003
- 21,709
- 10,721
- Thread Starter
- #49
They have the most market share. They have the most to lose.
Mexico has the ability to cut off the most from them.
Let's be very clear that the Mexican gov't did this deal very much with a knowledge of what AM wanted and needed and who AM's competitors are.
Mexico has the ability to cut off the most from them.
Let's be very clear that the Mexican gov't did this deal very much with a knowledge of what AM wanted and needed and who AM's competitors are.
How exactly will this "not turn out well" for AA and UA. Would love to hear your Delta spin on this one...
For the record I fully support all Open Skies treaties, although I do not support any form of ATI whatsoever, whether it be AA/BA or DL/AM, and am hopeful that all ATIs will be disbanded over the next decade or so as the harmful affects of them become obvious (though I expect it will be the EU that starts the disbanding, not the U.S.).
For the record I fully support all Open Skies treaties, although I do not support any form of ATI whatsoever, whether it be AA/BA or DL/AM, and am hopeful that all ATIs will be disbanded over the next decade or so as the harmful affects of them become obvious (though I expect it will be the EU that starts the disbanding, not the U.S.).
OP
- Dec 5, 2003
- 21,709
- 10,721
- Thread Starter
- #51
AA has as many if not more plans for defending and expanding its market in Mexico as DL does in growing it.
None of that will happen - and Mexico will put ALL growth on hold - if the US refuses to work with an agreement which the Mexican gov't fully signed with the expectation of growing
Your last paragraph is perplexing.
the whole notion of Open Skies is to provide transparency sufficiently to allow partnerships. I can assure you that if there were no partnerships, AA would be in the WORST position of the US carriers. DL and UA have gained more than enough position in AA's key markets while AA has come nowhere near close to doing the same in DL and UA's top markets.
It is ONLY because of ATIs and JVs that AA is still in the game in much of the int'l market.
but it doesn't really matter. The US is not going back to a non-ATI/JV world.
And Mexico isn't going to accept giving access to its markets without gaining ATI and JV.
None of that will happen - and Mexico will put ALL growth on hold - if the US refuses to work with an agreement which the Mexican gov't fully signed with the expectation of growing
Your last paragraph is perplexing.
the whole notion of Open Skies is to provide transparency sufficiently to allow partnerships. I can assure you that if there were no partnerships, AA would be in the WORST position of the US carriers. DL and UA have gained more than enough position in AA's key markets while AA has come nowhere near close to doing the same in DL and UA's top markets.
It is ONLY because of ATIs and JVs that AA is still in the game in much of the int'l market.
but it doesn't really matter. The US is not going back to a non-ATI/JV world.
And Mexico isn't going to accept giving access to its markets without gaining ATI and JV.
Welcome - or should I say "bienvenidos?" - back to Delta fantasyland, where Mexico is going to "put ALL growth on hold" for all U.S. airlines because Aeromexico can't get a JV. Okay. Because starting a pissing match with your largest trading partner, on which the strength and stability of your economy rests, is an awesome strategy.
But it makes sense because, as previously said ... Delta.
But it makes sense because, as previously said ... Delta.
OP
- Dec 5, 2003
- 21,709
- 10,721
- Thread Starter
- #53
You can't grasp that the whole new treaty was heavily started because of the benefits that AM could receive from it; and conversely the reason why Mexico didn't move forward was because AM did just fine with the status quo.
Mexico thought they were getting an agreement that the US would use as the basis for joint ventures and ATI.
If the Mexican gov't doesn't get that, you can absolutely bet that the new agreement will not move forward with other carriers gaining benefits while AM gets nothing it doesn't already have.
and if the Mexican gov't felt it was lied to and manipulated, they will do what they have to do to make it clear that they won't allow anyone to benefit if AM can't.
Mexico thought they were getting an agreement that the US would use as the basis for joint ventures and ATI.
If the Mexican gov't doesn't get that, you can absolutely bet that the new agreement will not move forward with other carriers gaining benefits while AM gets nothing it doesn't already have.
and if the Mexican gov't felt it was lied to and manipulated, they will do what they have to do to make it clear that they won't allow anyone to benefit if AM can't.
Good for the Mexican government - they can feel free to complain about being "lied to and manipulated."
In the meantime, AA, United and other competitors will continue to grow using opportunities that exist under the existing existing, "status quo," U.S.-Mexico bilateral. (It is notable that both of the new routes AA has recently announced between the U.S. and Mexico were and are covered under the existing bilateral.)
Now if Mexico wants to renounce the entire existing U.S.-Mexico bilateral regime because Aeromexico and Delta got their feelings hurt - then good luck with that. Mexico needs the U.S. far more than the other way around - in civil aviation, and in general.
In the meantime, AA, United and other competitors will continue to grow using opportunities that exist under the existing existing, "status quo," U.S.-Mexico bilateral. (It is notable that both of the new routes AA has recently announced between the U.S. and Mexico were and are covered under the existing bilateral.)
Now if Mexico wants to renounce the entire existing U.S.-Mexico bilateral regime because Aeromexico and Delta got their feelings hurt - then good luck with that. Mexico needs the U.S. far more than the other way around - in civil aviation, and in general.
OP
- Dec 5, 2003
- 21,709
- 10,721
- Thread Starter
- #55
and what you can't seem to accept is that the Mexican gov't very well could revoke the EXISTING agreement as well if it wants to make the point that it expected it was signing an agreement that would lead to a JV and ATI.
and when air service treaties have been revoked, it rarely involves cutting services that are already operating but often does involve permitting any further growth.
we can argue about this but no one should be surprised if the Mexican agreement reacts very strongly to this action by the DOT which is clearly outside of what was expected.
and when air service treaties have been revoked, it rarely involves cutting services that are already operating but often does involve permitting any further growth.
we can argue about this but no one should be surprised if the Mexican agreement reacts very strongly to this action by the DOT which is clearly outside of what was expected.
eolesen
Veteran
- Jul 23, 2003
- 15,988
- 9,428
topDawg
Veteran
- Nov 23, 2010
- 2,957
- 2,353
While I don't think the Mexican gov is going to go nucleareolesen said:
I am sure they are not happy with this. A big part of why they were willing to get rid of the 2-3 carrier (depending on route) rule was because of a AM JV to keep them strong. Without a JV AM could be in deep trouble with the influx of US LCCs.
Again, the US is doing what they have been great at under Obama. "Yeah, we will do that..........errr.... just kidding".
OP
- Dec 5, 2003
- 21,709
- 10,721
- Thread Starter
- #58
sorry, E, but dawg is right and you are wrong once again.
If the US had no intention of granting ATI or allow JVs unless full Open Skies was granted, then that should have been made abundantly clear during the negotiations.
I'm honestly not sure how big of a gap really exists but dawg is absolutely right. Latin American governments and their airlines have long been very reluctant to do Open Skies deals with the US because of the massive size and number of US carriers compared to their Latin peers.
If other Latin governments see what has happened here, progress toward liberalizing agreements takes a serious step back.
and let's also look at what AA, the dominant carrier in Latin America, wants to accomplish in protecting its market share and see why Mexico and AM are undoubtedly hopping mad.
If this agreement does nothing but prove that real market reforms can't happen without further weakening of the hometown carrier, then AA will indeed be hurt.
Even with the limited market access for new competition and the BA JV that occurred at LHR, the table was turned against AA. the imbalance is far worse in Latin America and other carriers and governments will simply allow the status quo to remain if other foreign carriers can't successfully compete.
If Mexico is forced to provide true Open Skies without having the opportunity for AM and other Mexican carriers to gain a benefit and defend its markets, then market reforms won't happen.
this tift with Mexico and the US is emblematic of the larger imbalance in US- Latin America aviation relationships.
it's not just a matter of maintaining the status quo but that the Mexicans can't help but believe they were lied to.
If the US had no intention of granting ATI or allow JVs unless full Open Skies was granted, then that should have been made abundantly clear during the negotiations.
I'm honestly not sure how big of a gap really exists but dawg is absolutely right. Latin American governments and their airlines have long been very reluctant to do Open Skies deals with the US because of the massive size and number of US carriers compared to their Latin peers.
If other Latin governments see what has happened here, progress toward liberalizing agreements takes a serious step back.
and let's also look at what AA, the dominant carrier in Latin America, wants to accomplish in protecting its market share and see why Mexico and AM are undoubtedly hopping mad.
If this agreement does nothing but prove that real market reforms can't happen without further weakening of the hometown carrier, then AA will indeed be hurt.
Even with the limited market access for new competition and the BA JV that occurred at LHR, the table was turned against AA. the imbalance is far worse in Latin America and other carriers and governments will simply allow the status quo to remain if other foreign carriers can't successfully compete.
If Mexico is forced to provide true Open Skies without having the opportunity for AM and other Mexican carriers to gain a benefit and defend its markets, then market reforms won't happen.
this tift with Mexico and the US is emblematic of the larger imbalance in US- Latin America aviation relationships.
WorldTraveler said:
WorldTraveler said:
You're starting to spin like Iranian centrifuges and contradicting yourself.
On one hand you write that Mexico signed the new treaty because AM needed it, then you proceed to say that Mexico will just tear up the treaty. So which is it: does Mexico/AM have the upper hand or don't they?
\Who needs the treaty more - Mexico/AM or United States / AAUAetc.?
Pick one, you can't have it both ways.
OP
- Dec 5, 2003
- 21,709
- 10,721
- Thread Starter
- #60
again, your own confusion and mental ineptitude prevent you from being able to understand the issues or the outcome.
Most US-Mexico traffic DOES originate from the US - but that is driven by leisure markets.
From MEX, GDL, and business markets, it is quite balanced.
but none of that changes that aviation agreements including the present one are indeed AGREEMEMNTS.
Countries sign them based on MUTUAL benefits.
Mexico fully believed the new agreement would lead to ATI and JV for AM.
If they see that happening under the agreement which the DOT negotiated, they could very well pull the future agreement but also limit growth for US carriers under the CURRENT agreement.
Only someone who fails to understand the way int'l agreements DO happen in reality including with aviation would believe that Mexico can have been the victim of a bait and switch and just roll and over and keep going as if nothing happened.
Most US-Mexico traffic DOES originate from the US - but that is driven by leisure markets.
From MEX, GDL, and business markets, it is quite balanced.
but none of that changes that aviation agreements including the present one are indeed AGREEMEMNTS.
Countries sign them based on MUTUAL benefits.
Mexico fully believed the new agreement would lead to ATI and JV for AM.
If they see that happening under the agreement which the DOT negotiated, they could very well pull the future agreement but also limit growth for US carriers under the CURRENT agreement.
Only someone who fails to understand the way int'l agreements DO happen in reality including with aviation would believe that Mexico can have been the victim of a bait and switch and just roll and over and keep going as if nothing happened.
Similar threads
- Locked
