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U.S. downgrade of Mexico air safety ‘not about Aeromexico,’ Delta says

imageStock Markets25 minutes ago (May 25, 2021 10:26AM ET)

(C) Reuters. FILE PHOTO: Delta Air Lines passenger planes are seen parked due to flight reductions made to slow the spread of coronavirus disease (COVID-19), at Birmingham-Shuttlesworth International Airport in Birmingham, Alabama, U.S. March 25, 2020. REUTERS/Elijah

By Tracy Rucinski and David Shepardson

(Reuters) -The expected U.S. downgrade of Mexico’s aviation safety rating is not about the safety of Delta Air Lines Inc (NYSE:DAL)’s partner Aeromexico and will have little impact on customers, Delta’s president said on Tuesday.

The planned downgrade by the U.S. Federal Aviation Administration (FAA) could come as early as Tuesday, people familiar with the matter said, and follows a lengthy review of Mexico’s aviation oversight by the agency.

“This is not about Aeromexico. This is about the Mexican version of the FAA not having some of the right protocols in place,” Delta President Glen Hauenstein said at a Wolfe Research conference.

Delta has a codeshare arrangement with Aeromexico enabling them to sell seats on each other’s flights. Delta would be forced to remove its codes on Aeromexico flights following the downgrade, though Aeromexico could continue to code on Delta flights and members of Delta’s loyalty program could still receive SkyMiles on Aeromexico flights that would normally carry the code, Hauenstein added.

“So very little impact for our customers booking through Delta,” Hauenstein said.

“What is does do is restrict Aeromexico’s ability to grow into the United States,” Hauenstein added.

Delta and Aeromexico have been joint venture partners since 2017. Delta also owns 49% of Aeromexico but took a $770 million charge on its investment last year after the carrier’s Chapter 11 bankruptcy filing.

Reuters reported the expected downgrade on Friday.

This would not be the first time the FAA downgraded Mexico’s air safety rating. In 2010, the agency downgraded Mexico due to suspected shortcomings within its civil aviation authority, then restored its top rating about four months later.

U.S. downgrade of Mexico air safety ‘not about Aeromexico,’ Delta says

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