Michigan Business Beat | Brian Shoaf, Detroit Regional Chamber - Delta Air Lines/Aeromexico Proposal

Michigan Business Network

Jeffrey Mosher welcomes Brian Shoaf, Director, Government Relations Director, Detroit Regional Chamber, Detroit, MI Discussing the federal proposal to terminate agreement between Delta Air Lines and Aeromexico: There were several questions raised regarding Delta Air Lines & Aeromexico agreement at risk: Brian Shoaf, Government Relations Director with the Detroit Regional Chamber is here to talk today about a federal proposal involving Delta Airlines and Aeromexico that would impact the Michigan business community and consumers. The federal department action would disrupt seamless leisure and business travel between the U.S. and Mexico and would harm Michigan's economy. Welcome Brian. Tell us about the federal proposal to terminate a partnership between the two airlines and why the Detroit Chamber thinks the decision should be reconsidered? Brian: A federal proposal to terminate a vital partnership between Delta Air Lines and Aeromexico would put local flights and jobs in jeopardy. The U.S. Department of Transportation (DOT) proposed the termination of the Joint Cooperation Agreement (JCA) between Delta Air Lines and Aeromexico in January 2024 without any prior notice due to unrelated change's to Mexico's aviation policy. The administration's decision is drastic, punitive, counterproductive and unprecedented. A final decision is expected this fall. This proposed action is troubling for Metro Detroit businesses and will also concern consumers once they become aware of it. 45 million-plus travelers have benefitted from this strategic partnership. Delta Air Lines and Aeromexico have operated 264,000-plus flights and flown 386 million miles, equalizing 15,500 trips around the world. Brian, Tell us more about this agreement? Brian: Delta Air Lines and Aeromexico's successful strategic partnership was approved by the DOT in 2016. This partnership has created and supported thousands of jobs in both countries, US and Mexico, and has led to a substantial increase in service and consumer choice between the U.S. and Mexico. What is the impact of this proposal on the Delta and Aeromexico partnership Brian? Brian: The termination of this partnership would put up to 23 flight routes between the US and Mexico at risk of cancelation, including 5 that go in and out of Detroit Metro Airport. In 2023, these 5 routes served more than 440,000 passengers. The cancelation of these important flight routes would decrease market competition. Many Michigan businesses benefit from this strategic partnership, including the Detroit Three automakers? Brian: Yes. These flights are now essential components of their businesses and allow product purchasers and plant managers to travel between the two essential hubs in less than five hours. Eliminating these direct flights will lead to less efficient travel, resulting in lost production time and quality of our products. This partnership provides direct flights to the Detroit three automakers' manufacturing plants in Mexico. These direct routes have become essential components of the assembly line, allowing product purchasers and plant managers to freely travel between the two hubs in less than 5 hours. How does this partnership between the two airlines impact tourism? Brian: Estimates show that around half a million Mexican tourists visited Michigan in 2023, beach towns and small businesses depend on strong summer tourism months. The loss of direct flights between DTW and Mexico will serve as a significant barrier for prospective Michigan tourists costing Michigan $1,500 per visitor. What is the bottom line here Brian? Brian: When this decision comes to fruition, no other airline will be able to fill the void that Delta’s hub capacity at Detroit Metro Airport (DTW) currently occupies. The DOT should consider the economic impacts that will result from fewer flights out of DTW and let the partnership stand.