Mexico sees no reason for US to impose sanctions on airlines

MEXICO CITY (Reuters) -Mexican President Claudia Sheinbaum said on Monday that her government has not yet received formal notification from the U.S. over potential measures against Mexico's airline sector, adding that she sees no justification for such sanctions.

The U.S. Department of Transportation said on Saturday it would take action in response to Mexico's decision to cut flight slots and force cargo carriers to relocate operations in Mexico City, affecting U.S. airlines.

"There is no reason for Mexico to receive any sanctions for changes made to the capital's airport system," Sheinbaum said at her daily news conference.

U.S. Transportation Secretary Sean Duffy said in a statement on Saturday that the department may reject new flight requests from Mexican carriers if concerns over airport decisions made in 2022 and 2023 are not addressed.

The department would also propose withdrawing antitrust immunity granted to Delta Air Lines for its joint venture with Aeromexico to address competition concerns, according to the statement.

Mexican air transportation chamber Canaero, also in a statement, called for dialogue and bilateral cooperation to strengthen U.S.-Mexico aviation.

"The measures announced by the United States government represent a significant impact on the airline industry, with potential repercussions on connectivity, trade flows, and the competitiveness of the sector between both nations," it added.

CHESS GAME AHEAD OF USMCA REVIEW

Fernando Gomez, an independent airline industry analyst, said the broader U.S. goal would be to establish a strong negotiating position ahead of a review of the United States-Mexico-Canada trade agreement (USMCA).

"They are using this as a springboard to gain leverage, just as they did with tariffs and immigration," Gomez said. "USMCA is their ultimate goal."

The USMCA, which replaced the North American Free Trade Agreement in 2020 and was negotiated during U.S. President Donald Trump's first term, requires the three countries to hold a joint review after six years.

Sheinbaum, at her news conference, ruled out any reallocation of flights in the Mexican capital.

(Reporting by Raul Cortes and Natalia Siniawski; Additional reporting by Noe Torres; Editing by Brendan O'Boyle, Aida Pelaez-Fernandez and Dale Hudson)

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