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FOR PUBLICATION
In the
United States Court of Appeals
For the Eleventh Circuit
No. 25-13546
DELTA AIR LINES INC.,
AEROVIAS DE MEXICO, S.A. DE C.V.,
Petitioners,
versus
U.S. DEPARTMENT OF TRANSPORTATION,
Respondent.
Petition for Review of a Decision of the
Department of Transportation, NTSB
Agency No. DOT-OST-2015-0070
Before ROSENBAUM, BRANCH, and TJOFLAT, Circuit Judges.
BRANCH, Circuit Judge:
The U.S. Department of Transportation (“DOT”) is
responsible for approving or denying the formation of
international airline joint ventures that operate in the United States
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2 Opinion of the Court 25-13546
based on its finding of the competitive and public interest effects
the joint venture will have.
Delta Air Lines, Inc., and Aerovias de México, S.A. de C.V.
(collectively, “the petitioners”) applied for approval of, and a grant
of antitrust immunity for, a joint venture (“the joint venture”) to
provide integrated airline services between the United States and
Mexico. In 2016, DOT approved the joint venture and granted it
antitrust immunity.
But DOT’s role does not end once it approves a joint
venture—it can terminate approval of a joint venture after a
subsequent review of the joint venture’s impact on competition,
including review of whether the joint venture is providing
important public benefits and whether alternatives that are
materially better for competition can meet transportation needs.
So, in 2024, DOT issued show-cause orders that proposed ending
the joint venture’s approval and antitrust immunity because it
believed the competitive landscape had worsened when the
Mexican government restricted take-off and landing slots and
banned all-cargo carriers from operating at one Mexico City
airport. And in 2025, nine years after DOT approved the joint
venture, it issued a final order that ended approval of the joint
venture and withdrew its antitrust immunity.
The petitioners petitioned for review of the final order in
this Court, arguing that the final order was arbitrary and capricious,
and we stayed the final order pending our review. After careful
review and with the benefit of oral argument, we agree with the
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petitioners. DOT did not reasonably explain why it conducted a
far more limited market analysis in this case than it has always done
in the past or why it imposed a requirement for approval of the
joint venture that it did not require of similar joint ventures it
approved in Japan. Accordingly, we vacate the final order.
I. Background
A. Industry & Statutory Background
Joint ventures between airlines that operate in international
markets are common and often necessary to provide travelers with
a broad network of connections because many jurisdictions
prohibit foreign ownership of their airlines. Brian Pearce & Gary
Doernhoefer, The Economic Benefits Generated by Alliances and Joint
Ventures, Int’l Air Transp. Ass’n, Nov. 28, 2011, at 1. The parties to
a joint venture can coordinate flight schedules, expand their
capacity and offerings, and reduce travel time for consumers. Id.
at 7. Some joint ventures, including the joint venture in this case,
are considered “metal neutral,” which means that the partners to
the joint venture share revenue regardless of which airline flies the
passenger. Id. at 2.
In addition to the private joint ventures that facilitate
international air travel, the United States negotiates “open skies”
agreements with the governments of various countries to liberalize
aviation markets. Defining Open Skies, DOT Order 92-8-13, 1992
WL 204010, at *1 (Aug. 5, 1992). The “basic elements” of an open
skies agreement include, for example, “[o]pen entry on all routes,”
“[u]nrestricted capacity and frequency on all routes,” and
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“[u]nrestricted route and traffic rights.” Id. at *5. The United States
and Mexico entered into an open skies agreement in 2015 (“the
open skies agreement”). Air Transport Agreement Between the
Government of the United States of America and the Government of the
United Mexican States, U.S.-Mex., Dec. 18, 2015. Despite open skies
agreements that promote the freedom of airlines to fly all routes
free from government restrictions, extremely congested airports
nonetheless need to use a “slot” system to manage traffic. Slot
Administration – Slot Definition, Federal Aviation Administration,
https://www.faa.gov/about/office_org/headquarters_offices
/ato/service_units/systemops/perf_analysis/slot_administration
/slot_definition [https://perma.cc/K7AF-DN5V]. A slot is an
authorization to take-off or land at a particular airport on a
particular day during a specified time period. Id.
American air carriers can apply to DOT for approval of their
joint ventures with foreign air carriers, which DOT “shall approve”
if the joint venture “is not adverse to the public interest.” 49 U.S.C.
§ 41309(a)–(b). In addition to approving a joint venture, DOT
“may exempt a [joint venture] affected by [an approval] order from
the antitrust laws to the extent necessary to allow the person to
proceed with the transaction specifically approved by the order.”
Id. § 41308(b). DOT shall disapprove, or “after periodic review”
can end approval of, a joint venture “that substantially reduces or
eliminates competition” unless the joint venture “is necessary to
meet a serious transportation need or to achieve important public
benefits (including international comity and foreign policy
considerations); and the transportation need cannot be met or
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those benefits cannot be achieved by reasonably available
alternatives that are materially less anticompetitive.” 1 Id.
§ 41309(b).
B. Procedural History
In March 2015, the petitioners filed with DOT an application
for approval of, and antitrust immunity for, the joint venture. The
joint venture, the application explained, would coordinate on
routes between the United States and Mexico, be metal neutral,
and combine the petitioners’ respective networks to create a new
competitor in the U.S.-Mexico aviation market. The joint venture
would include “all nonstop transborder routes” operated by the
petitioners between the United States and Mexico, “as well as
behind and beyond connecting flights within [the United States or
Mexico].” The petitioners’ application identified 22 routes that it
predicted would see increased traffic if the joint venture was
approved, with eight routes having a predicted increase of 20% or
more. Ultimately, the application predicted that the joint venture
would lead to increased competition and would deliver public
benefits like a broader network of flights between the United States
and Mexico, increased flight frequency, and more seamless
scheduling.
In November 2016, DOT “grant[ed] approval of and
antitrust immunity . . . for” the joint venture. In conducting its
1 The petitioners do not challenge how DOT interprets this statutory
language. Thus, Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), is not
implicated.
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analysis pursuant to 49 U.S.C. §§ 41308, 41309, DOT first examined
the “country-pair” market, 2 which is the broader U.S.-Mexico
market. Next, DOT analyzed all “city-pair” markets (for example,
the Chicago-Los Cabos market). 3 There are 1,687 city-pairs in the
U.S.-Mexico market. Two of the largest city-pair markets within
the U.S.-Mexico market are Los Angeles-Guadalajara (LAX-GDL)
and New York JFK-Mexico City (JFK-MEX).
DOT’s country-pair analysis included statistics regarding the
number of passengers and percentage share of the market that all
airlines controlled. DOT then predicted how those figures would
change if it approved the joint venture, agreeing that the joint
venture would benefit the public by allowing the petitioners to join
American Airlines and United Airlines as the primary U.S.-Mexico
market competitors. And on the city-pair level, DOT conducted a
“share shift analysis,” which predicted which city-pairs would see a
reduction in the number of competitors following approval of the
joint venture. DOT’s city-pair share shift analysis also factored in
the size of the markets that would see a reduction in competition.
DOT concluded that the joint venture would result in increasing
the number of viable competitors in 15 markets, while only
reducing the number of competitors in small markets that make up
less than one percent of all U.S.-Mexico passengers.
2 A country-pair is a market that encompasses all cross-border flights between
two countries—in this case, the United States and Mexico.
3 A city-pair is a market that is a subset of a country-pair market and
encompasses all flights between two specific airports.
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But DOT expressed concern about one Mexican airport,
specifically “the [Mexican government’s] non-transparent slot
allocation regime . . . at Mexico City’s Benito Juarez International
Airport [(“MEX”)],” which it thought could impede competition,
particularly because the petitioners, through the joint venture,
would control almost half of the slots at MEX.
To attempt to address its concerns over slot allocation at
MEX, DOT conditioned its approval as follows: petitioners must
divest 24 slot-pairs at MEX, and DOT’s grant of antitrust immunity
to the joint venture would be limited to five years. The petitioners
complied with DOT’s condition, divested the slots, and began
operating the joint venture with DOT’s approval.
In March 2022, the petitioners applied to renew the joint
venture’s approval and antitrust immunity. The petitioners’
renewal application included their assessment of how the joint
venture affected the country-pair market and the city-pair markets
since its approval and grant of antitrust immunity. They reported
that the joint venture had increased U.S.-Mexico flight capacity by
761 seats per day, “significantly expanded capacity” on 26 city-pair
routes, and “launch[ed] entirely new service on six [city-pair]
routes.” DOT extended the joint venture’s approval and antitrust
immunity while its renewal application was pending.
Then, in January 2024, DOT issued a show-cause order that
proposed terminating the joint venture’s approval and antitrust
immunity, focusing again on one airport—MEX. DOT explained
that “recent actions taken by the Government of Mexico” as to
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MEX were inconsistent with the open skies agreement between the
United States and Mexico, and under longstanding DOT policy, “de
facto or de jure implementation” of the open skies agreement was a
“necessary precondition” for antitrust immunity of a joint
venture. 4 In addition to its previously stated concerns regarding
slot allocation at MEX, DOT noted that “[t]he Government of
Mexico issued a decree in which all-cargo operations were
prohibited at MEX,” 5 which is inconsistent with the “[l]iberal cargo
regime” that is a part of DOT’s definition of open skies. See Defining
Open Skies, 1992 WL 204010, at *6. And DOT, “[d]espite further
formal engagement with the Mexican Government,” claimed that
it had not made progress toward resolving its concerns at MEX. So
DOT “tentatively dismisse[d] without prejudice” the petitioners’
renewal application.
In response, the petitioners filed an objection to the showcause order. The petitioners argued that in the show-cause order
DOT (1) failed to apply the relevant statutory standard; (2) did not
sufficiently engage with the research and analysis in their renewal
application; (3) made an unsupported finding that regulatory
conditions at MEX caused material harm to the aviation market;
4 DOT also described an implemented open skies agreement as a
“fundamental prerequisite needed to allow for consideration of [approving a
joint venture].”
5 All-cargo flights transport only cargo, not passengers. Commercial passenger
flights, however, in some instances carry passengers and additionally load
cargo into the “belly” of the aircraft. The petitioners carried 73% of belly cargo
between the United States and MEX in 2022–2023.
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(4) applied a more stringent standard for approval than it had
applied to other joint ventures; (5) ignored several reasonable
alternatives to terminating approval of the joint venture; and
(6) did not provide interested parties the opportunity to comment.
DOT then issued a supplemental show-cause order. The
supplemental show-cause order primarily focused on the “changed
circumstances” since DOT initially approved the joint venture in
2016 and how those changed circumstances affected the public
benefits the joint venture could provide. What were those changed
circumstances? DOT reiterated its concern that the Mexican
government imposed “anticompetitive measures” at one Mexican
airport—MEX—which were “distorting the marketplace.” DOT
explained its stance that the Mexican government began breaching
the open skies agreement in 2022 when it “arbitrarily reduced
capacity” at MEX and “confiscated slots from U.S. carriers at MEX,”
which continued in 2023 when it “ordered all-cargo carriers to
vacate MEX.” According to DOT, slot allocation at MEX was no
longer transparent, it was discriminatory, and it lacked coherence.
As DOT described it, the problematic slot administration at MEX
included “confiscat[ing] slots on spurious and unsupported
grounds [and] refus[ing] to implement reforms suggested by
Mexico’s competition authority.” Following those regulatory
changes at MEX, DOT alleged that by 2024, the petitioners began
to deliver more growth at MEX than their competitors. As DOT
saw it, the petitioners’ “dominant slot holdings and favored
positioning at MEX” allowed them capacity to announce new
routes between the United States and MEX, while other carriers,
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including those whose slots were confiscated, were forced to cut
capacity between the United States and MEX. And the petitioners
gained an advantage from the all-cargo ban given their ability to
carry “belly cargo” on their passenger flights that land at MEX.
The petitioners objected to the supplemental show-cause
order too. The petitioners’ objection included its own country-pair
analysis and predictions on how termination of the joint venture’s
approval would affect the U.S-Mexico competitive landscape. For
example, the petitioners predicted that termination of the joint
venture’s approval would risk eliminating nonstop service on 21
city-pair routes. Beyond providing an analysis of the relevant
markets, the petitioners largely reiterated their objections to the
initial show-cause order.
In September 2025, over the petitioners’ objections and after
fielding comments from interested parties, DOT issued a final
order terminating approval of the joint venture and its grant of
antitrust immunity. DOT largely reiterated the reasoning it
provided in its show-cause orders, again focusing its concerns on
the Mexican government’s slot-allocation and all-cargo policies at
one Mexican airport—MEX. 6 In the final order, DOT concluded
6 DOT also defended against two of the petitioners’ objections to the showcause orders. First, DOT explained why it thought it adequately supported
with consistent reasoning its conclusion that regulatory conditions at MEX
materially harmed competition. Second, DOT stated its belief that there were
not reasonable alternatives to terminating approval of the joint venture. We
need not discuss those issues further because we do not reach them in our
review of the final order.
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that based on these policies at MEX, the “joint venture substantially
reduces or eliminates competition in [the] markets [in which it
participates] and is adverse to the public interest.”
Unlike its comprehensive market analysis in 2016 that
evaluated competition in the U.S.-Mexico market and 1,687 citypair markets, DOT simply highlighted four general competitive
concerns in the final order, each of which related to conditions at
MEX. 7 DOT determined that those four concerns warranted
terminating approval of the joint venture given DOT’s obligation
to “avoid[] conditions that would tend to allow at least one air
carrier . . . to unreasonably increase prices, reduce services, or
exclude competition in air transportation.” See 49 U.S.C.
§ 40101(a)(10). Notably, the final order did not include (1) updated
country-pair figures reflecting each competitor’s number of
7 First, DOT determined that the petitioners’ “predominant share . . . at
MEX . . . create[d] the possibility for anticompetitive and efficiency-reducing
outcomes.” Second, based on the Mexican government’s “interventionist and
arbitrary capacity decisions in Mexico City,” DOT predicted that the Mexican
government “could act in a similar manner at other congested gateways such
as Cancun,” which would harm competition. Third, DOT found that the
“stalled and retrenched approach to slot administration [at MEX],” the
petitioners’ control of the lion’s share of slots at MEX, and their antitrust
immunity enabled them to “achieve better outcomes than would be possible
for other carriers in light of regulatory conditions.” Fourth, DOT found that
antitrust immunity enabled the joint venture to materially benefit from the
prohibition on all-cargo carriers at MEX because, given its capacity to
transport belly cargo, it could still “coordinate cargo operations to, from, and
via MEX,” which “unnecessarily and artificially reduce[d] competition in cargo
markets.”
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passengers transported and share of the market; (2) its prediction
for how those numbers would change if it continued to approve of
the joint venture; or (3) a share shift analysis at the city-pair level.
Instead, DOT applied its findings, which were based on its four
competitive concerns at MEX only, to the statutory language of 49
U.S.C. § 41309 and found that the joint venture was not necessary
to “meet a serious transportation need or to achieve important
public benefits.”
The petitioners timely petitioned for review of the final
order in this Court and sought a stay pending review, which we
granted.
II. Discussion
The petitioners argue that the final order was arbitrary and
capricious because DOT failed to reasonably justify (1) how it
analyzed whether to terminate approval of the joint venture and
its grant of antitrust immunity and (2) its ultimate decision to
terminate approval of the joint venture and its grant of antitrust
immunity. We agree with the petitioners that the final order was
arbitrary and capricious for two reasons, each related to DOT’s
method of analysis. First, DOT did not reasonably explain its
reliance on market conditions at a single airport, which was a
departure from its uniform practice of conducting far broader
market analyses. Second, DOT did not reasonably explain why it
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imposed an open skies requirement to approve the joint venture
when it has not imposed such a requirement in other similar cases.8
The petitioners’ challenge to the final order proceeds under
the Administrative Procedure Act (“APA”). See 5 U.S.C. §§ 701–
706. Under the APA, reviewing courts must “hold unlawful and
set aside agency action[s]” that are “arbitrary, capricious, an abuse
of discretion, or otherwise not in accordance with law.” 5 U.S.C.
§ 706(2). “The APA’s arbitrary-and-capricious standard requires
that agency action be reasonable and reasonably explained,” which
is a deferential standard. FCC v. Prometheus Radio Project, 592 U.S.
414, 423 (2021). Under the APA, we are deferential not just to the
agency’s ultimate decision, but also to its “drafting decisions like
how much discussion to include on each topic, and how much data
is necessary to fully address each issue.” Black Warrior Riverkeeper,
Inc. v. U.S. Army Corps of Eng’rs, 833 F.3d 1274, 1285 (11th Cir. 2016).
Because our review pursuant to the APA is deferential, we
are “not to substitute [our] judgment for that of the agency.” Motor
Vehicle Mfrs. Ass’n U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S.
29, 43 (1983). Under the APA, “we ask only whether ‘the agency
came to a rational conclusion.’” Gray Television, Inc. v. FCC, 130
F.4th 1201, 1212 (11th Cir. 2025) (quoting Sierra Club v. Van
8 Because we hold that DOT departed from its precedent without sufficient
justification and did not treat like cases alike in the final order, we need not,
and do not, reach the petitioners’ arguments that the final order was also
arbitrary and capricious because it relied on speculation and unsupported
facts, was internally inconsistent, and failed to reasonably consider alternative
actions.
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Antwerp, 526 F.3d 1353, 1360 (11th Cir. 2008)). But “we are not a
rubber stamp—‘courts retain a role, and an important one, in
ensuring that agencies have engaged in reasoned decisionmaking.’”
In re Gateway Radiology Consultants, P.A., 983 F.3d 1239, 1263 (11th
Cir. 2020) (quoting Judulang v. Holder, 565 U.S. 42, 53 (2011)).
A. DOT’s focus on MEX departed from its precedent
The petitioners argue that DOT’s final order was arbitrary
and capricious because it relied on its concerns about competition
at MEX, a single airport, in a manner that was inconsistent with
DOT’s precedent, which has historically involved a more complete
market analysis. DOT argues that the final order can be squared
with its precedent because it conducted a more complete
evaluation of the relevant markets when it approved the joint
venture in 2016 and this case, unlike the precedent the petitioners
point to, is distinguishable because it involved revoking a joint
venture’s approval. We agree with the petitioners that DOT
abruptly departed from its uniform precedent of conducting a
comprehensive market analysis without reasonably explaining
such a departure.
An agency action is arbitrary and capricious if “it is an abrupt
and unexplained departure from agency precedent.” LopezMartinez v. U.S. Att’y Gen., 149 F.4th 1202, 1210 (11th Cir. 2025).
While an agency can depart from its precedent, it must “explain its
departure . . . and adequately explain the rationale of its decision.”
McHenry v. Bond, 668 F.2d 1185, 1192–93 (11th Cir. 1982). For
example, the Supreme Court has held that the Federal
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Communications Commission reasonably departed from its
precedent when it “acknowledged that its recent actions
[increasing enforcement against broadcasting expletives] broke
new ground” and reasonably determined that technological
advances made it easier to “bleep out” certain words and justified
such increased enforcement. F.C.C. v. Fox Television Stations, Inc.,
556 U.S. 502, 517–18 (2009). But in another case, the Supreme
Court held that the National Highway Traffic Safety
Administration did not reasonably explain its departure from
requiring new motor vehicles to be equipped with passive
restraints (seatbelts or airbags). Motor Vehicle Mfrs. Ass’n, 463 U.S.
at 33–34. There, the agency relied on its determination that many
people may not use seatbelts even if they are installed, but it did
not adequately consider relevant information like the safety
benefits of airbags and quickly dismissed the fact that certain types
of seatbelts were more commonly used than others. Id. at 47, 55–
56.
We find that DOT departed from its precedent without
providing a reasonable explanation when it issued the final order.
Until this case, when evaluating joint ventures between airlines
pursuant to 49 U.S.C. §§ 41308, 41309, DOT’s uniform practice has
been to “weigh[] both pro- and anti-competitive effects” of a
venture “as a whole,” “across a number of different markets,”
which included a “broad assessment” “at the network, countrypair, and city-pair levels.” Am. Airlines, Inc., DOT Order 2010-7-8
at 9 (July 20, 2010). For example, when considering approval of a
joint venture between KLM Dutch Airlines and Northwest
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Airlines, DOT analyzed the “U.S.-Europe, the U.S.-Netherlands,
and the Detroit/Minneapolis-St. Paul-Amsterdam markets.”
Northwest Airlines, Inc., DOT Order 93-1-11 at 9–10 (Jan. 11, 1993).
DOT does not contest that it undertakes such comprehensive
reviews when evaluating joint ventures seeking approval and
antitrust immunity; in fact, DOT has never before departed from
this broad method of market analysis. And DOT has explicitly
rejected requests for it to rely on narrower analyses, like assessing
potential competitive harm a joint venture may cause in certain
city-pair markets without considering the severity of that harm or
the competitive benefits of the joint venture as a whole. Am.
Airlines, Inc., DOT Order 2010-7-8 at 9. Instead, DOT said that it
conducts a “broad assessment” of the relevant country-pairs and
city-pairs even if it finds that a joint venture will result in reduced
competition in subsets of the broader market. Id.
Here, when reassessing the joint venture in 2025, DOT
abruptly departed from its uniform precedent of comprehensively
analyzing all of the relevant markets and instead relied on its
finding that there were anticompetitive conditions at MEX, a single
airport. The final order analyzed none of the 1,687 city-pairs in the
U.S.-Mexico market, let alone engaged in a comprehensive share
shift analysis like DOT did in 2016. Nor did it conduct a countrypair analysis of the U.S.-Mexico market. Unlike its initial analysis,
DOT did not survey the share of the market each competitor
controlled and predict how that landscape would evolve if the joint
venture continued to operate. Far from conducting a broad
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assessment across a number of different markets, DOT based its
decision on competitive concerns at MEX, a single airport.
DOT’s attempts to square its focus on MEX with its
precedent fail. First, it argues that the precedent the petitioners
point to involved approval of joint ventures, while the final order
addressed whether to terminate previous approval of the joint
venture. But the fact that the final order decided whether to
continue approval of the joint venture does not reasonably explain
why DOT departed from its uniform method of analysis. The
statutory standard DOT must apply for initial approval and
continuing approval of joint ventures is the same. See 49 U.S.C.
§ 41309(b). Yet DOT conducted a drastically more limited market
analysis when evaluating the petitioners’ application for continued
approval than it does when evaluating initial applications for
approval.
Second, DOT argues that it did not need to replicate the
more robust analysis of the relevant markets it conducted in 2016
because when it initially approved the joint venture it raised
concerns about the competitive conditions at MEX. This
explanation of its rationale is inadequate. While DOT did conduct
a more comprehensive analysis when it first approved the joint
venture in 2016, that analysis was nine years old when it issued the
final order. DOT does not explain why its 2016 analyses of the U.S.-Mexico market and various city-pairs were still accurate nine years
later. Nor does it explain why anticompetitive conditions at MEX
(which makes up only a 21% share of U.S.-Mexico flights) were
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severe enough to warrant ignoring the broader market. DOT’s
failure to provide an adequate explanation dooms the final order.
Accordingly, the final order was arbitrary and capricious
because DOT drastically departed from its uniform practice of
analyzing country-pairs and city-pairs without a reasonable
explanation of why such analyses were not necessary in this case.9
B. DOT did not treat like cases alike when it imposed an
open skies requirement upon the petitioners
The petitioners also argue that DOT held the joint venture
to a higher standard than other similarly situated joint ventures
when it made the Mexican government’s compliance with an open
skies agreement a prerequisite to renewing approval of the joint
venture. DOT tries to distinguish the other joint ventures the
petitioners point to by arguing that the diplomatic situation in
Mexico is unique. Again, we agree with the petitioners.
To survive arbitrary and capricious review, agencies must
“treat like cases alike.” Westar Energy, Inc. v. FERC, 473 F.3d 1239,
1241 (D.C. Cir. 2007); see also Black Warrior Riverkeeper, 833 F.3d at
1289 (analyzing whether an agency articulated sufficient rationale
for treating similar cases differently). But an agency can treat
similarly situated parties differently if it “provide[s] a ‘satisfactory
9 While we acknowledge that DOT has discretion to decide “how much data
is necessary to fully address each issue,” Black Warrior Riverkeeper, 833 F.3d at
1285, it has an independent responsibility to explain the stark departure it took
from its precedent in this case, see Lopez-Martinez, 149 F.4th at 1210. USCA11 Case: 25-13546 Document: 55-3 Date Filed: 08/20/2026 Page: 19 of 26
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explanation for its action.’” Black Warrior Riverkeeper, 833 F.3d at
1290 (quoting Motor Vehicle Mfrs. Ass’n, 463 U.S. at 42–43). In
reviewing that explanation, we consider whether there is a
“rational connection between the facts found and the choice made”
and “whether there has been a clear error of judgment.” Motor
Vehicle Mfrs. Ass’n, 463 U.S. at 43.
In the 2025 final order, DOT first stated that compliance
with “[a]n Open Skies regulatory framework is necessary under the
competition and public interest analysis required by Sections 41309
and 41308 but not sufficient to obtain approval of and maintain a
grant of [antitrust immunity]” (emphasis added). DOT
acknowledged that an open skies “preliminary test” was not in the
relevant statutes, but it justified such a requirement by stating that
a foreign government’s compliance with an open skies agreement
informs the required public interest and competition analysis of a
joint venture.
We agree with the petitioners that DOT’s requirement that
the Mexican government implement its open skies agreement at
MEX was arbitrary and capricious because DOT failed to treat like
cases alike. DOT has approved other joint ventures where there
was no implementation of an open skies agreement at an airport
where those joint ventures operate, and it did not reasonably
explain why it imposed such a requirement here. See Black Warrior
Riverkeeper, 833 F.3d at 1289. In 2009, the United States and Japan
entered into an open skies agreement, but that agreement carved
out Tokyo’s Haneda International Airport by prohibiting all-cargo
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20 Opinion of the Court 25-13546
service at Haneda, and Japan later limited American carriers to 18
daily slot-pairs at Haneda. Air Transport Agreement,
Memorandum of Understanding, Annex § 3, U.S.-Japan (Dec. 14,
2009); Delta Air Lines, Inc., DOT Order 2023-6-24 at 1 (June 30,
2023). Despite the lack of an implemented open skies agreement
between the U.S. and Japan that covered Haneda, DOT granted
approval of, and antitrust immunity for, two joint ventures
between American and Japanese airlines to operate at Haneda.
U.S.-Japan All., DOT Order 2010-11-10 at 1 (Nov. 10, 2010).
DOT did not treat like cases alike because it held the
petitioners to a higher standard for approval than the Japanese joint
venture applicants when it made compliance with an open skies
agreement at MEX necessary for approval in this case but approved
two Japanese joint ventures despite the lack of an open skies
agreement that included Haneda. And the final order does not
adequately explain why the lack of open skies at MEX (an all-cargo
ban and restrictive slot policies) mandated terminating approval of
the joint venture when DOT has approved two joint ventures in
Japan despite the lack of open skies at Haneda.
DOT resists our conclusion. DOT does not contest that it
held the petitioners to a higher standard than other joint venture
applicants. Instead, DOT attempts to distinguish this case,
reasoning that only Mexico “is unacceptably distorting
competition.” According to DOT, the United States and Japan
“productively collaborated” before and after approval of the two
joint ventures operating at Haneda and “competitive conditions at
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25-13546 Opinion of the Court 21
Haneda have improved” such that those joint ventures met the
statutory factors in 49 U.S.C. § 41309. But DOT’s argument is
nonresponsive to the petitioners’ concern that DOT imposed an
open skies requirement at MEX but not when evaluating approval
of other joint ventures that operate at a foreign airport that is
carved out of the relevant open skies agreement. Even if DOT is
correct that Mexico, unlike Japan, has not productively
collaborated with the United States on aviation issues, DOT made
open skies a necessary step for approval of this joint venture while
it was not necessary for the two similar joint ventures in Japan.
Because DOT did not treat like cases alike when it held the
petitioners and the U.S.-Japan joint venture applicants to different
standards for approval, the final order was arbitrary and capricious.
See Black Warrior Riverkeeper, 833 F.3d at 1289.
III. Conclusion
For the above reasons, the final order was arbitrary and
capricious. Accordingly, we vacate the final order.
VACATED.
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25-13546 ROSENBAUM, J., Concurring in the Judgment 1
Rosenbaum, Circuit Judge, Concurring in the Judgment:
I agree that we must grant Delta Air Lines, Inc., and
Aerovias de México, S.A. de C.V.’s petition for review of the
Department of Transportation’s final order ending approval of
Petitioners’ joint venture and withdrawing the joint venture’s
antitrust immunity. But I agree solely because DOT reasoned, in
significant part, that Mexico City’s Benito Juarez International
Airport did not comply fully with Mexico’s open-skies agreement
with the United States, and compliance with open-skies
agreements was “necessary . . . to obtain approval of and maintain
a grant of [antitrust immunity].” Delta Airlines, Inc., Aerovias de
Mexico, S.A. de C.V., Docket DOT-OST-2015-0070 (DOT Sept. 15,
2025) (“DOT Final Order”), at 17. As it turns out, that’s not entirely
accurate.
During oral argument, DOT conceded that Haneda Airport
in Tokyo, Japan, enjoys a carveout from the United States’s openskies agreement with Japan.1 Yet DOT approved, and granted
antitrust immunity to, two joint ventures between American and
Japanese airlines to operate at Haneda. U.S.-Japan All., DOT Order
2010-11-10 at 1 (Nov. 10, 2010). To be sure, DOT had its reasons
for exempting the joint venture at Haneda from the open-skies
requirement. But that doesn’t matter. The Haneda exemption
shows that DOT’s supporting statement that an airport’s
compliance with an open-skies agreement is “necessary” was
1 DOT explained that Haneda was only “in transition to being a fully openskies framework.” Oral Arg. at 19:58.
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2 ROSENBAUM, J., Concurring in the Judgment 25-13546
wrong. In fact, complete compliance with an open-skies
agreement with the United States is not “necessary.” Certainly, it’s
strongly preferred, But the Haneda arrangement shows that strict
compliance with an open-skies agreement is not “necessary.”
Although the Haneda experience shows compliance with an
open-skies agreement is not “necessary,” DOT used MEX’s failure
to strictly comply with the open-skies agreement as a sufficient
basis, in and of itself, to withdraw its approval of Petitioners’ joint
venture. So for the reasons the Majority Opinion discusses at Part
II.B., I agree with my colleagues that the DOT’s revocation here
was “arbitrary and capricious.”
That said, most respectfully, I disagree with the Majority
Opinion’s decision to grant the Petition because “DOT [allegedly]
abruptly departed from its uniform precedent of conducting a
comprehensive market analysis without reasonably explaining
such a departure.” Maj. Op. at 14. DOT did no such thing.
Approvals of new joint ventures and withdrawals of
approvals of existing joint ventures that DOT initially approved are
not both apples. So the Majority Opinion errs in comparing DOT’s
treatment of its withdrawal of approval of Petitioners’ joint
venture to DOT’s treatment of applications for new joint ventures.
When DOT receives an application for a new joint venture,
it starts from ground zero. It has no preexisting knowledge of how
the proposed joint venture functions in the air-traffic system and
no preexisting analysis of potential antitrust problems that the
proposed joint venture may present. So of course, DOT must
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25-13546 ROSENBAUM, J., Concurring in the Judgment 3
conduct a comprehensive analysis of all the factors that go into its
decision about whether to grant a new joint venture and antitrust
immunity.
That’s not the case, though, when DOT considers whether
to withdraw approval of an existing joint venture that it has
previously fully analyzed and continues to monitor. In that case,
as here, DOT knows what competition problems the joint venture
presents because DOT has previously identified those concerns
and because DOT can measure a joint venture’s ongoing progress
on those parameters. If problems DOT identified when it initially
approved the joint venture for a limited period have worsened, and
the joint venture can’t sufficiently explain why that doesn’t present
an unacceptable competition issue, there’s nothing arbitrary or
capricious about DOT’s decision to withdraw approval for the joint
venture. And that’s so whether DOT conducts a “comprehensive
market analysis” like it did with the initial joint-venture request or
a more limited analysis that continues to home in on the same
problems the DOT identified when it approved the initial
application.
So DOT’s treatment of applications for new joint ventures
does not tell us what “DOT’s uniform practice” is for withdrawing
approval of an existing joint venture that is failing to satisfy
concerns DOT identified when it approved the joint venture. See
Maj. Op. at 15–16. And we can’t accurately characterize DOT’s
different review practice for withdrawing approval of a joint
venture as a “depart[ure] from its precedent” when the precedent
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4 ROSENBAUM, J., Concurring in the Judgment 25-13546
we are considering is limited to that involving DOT’s review of
applications for new joint ventures.
Nor does the fact that “[t]he statutory standard DOT must
apply for initially approving and continuing approval of joint
ventures is the same,” Maj. Op. at 17, somehow mean that DOT
must necessarily engage in precisely the same scope of analysis on
an initial application and a withdrawal of approval of a joint
venture. After all, under the Administrative Procedure Act, DOT
has discretion to decide “how much data is necessary to fully
address each issue.” Black Warrior Riverkeeper, Inc. v. U.S. Army
Corps of Eng’rs, 833 F.3d 1274, 1285 (11th Cir. 2016). So as long as
DOT’s reasons for not engaging in as comprehensive an evaluation
when withdrawing approval for a joint venture as it did when
approving the joint venture in the first place are not arbitrary and
capricious (and for the reasons I’ve discussed, they aren’t here),
DOT need not perform precisely the same extent of analysis on a
withdrawal of approval as it does when granting a joint-venture
approval.
In short, DOT precedent involving withdrawals of approval
of joint ventures provides the appropriate universe for comparison
of DOT’s actions here. But the Majority Opinion identifies no such
precedent from which DOT’s analysis here departs.
And when we evaluate the analysis DOT undertook when
it withdrew approval of Petitioners’ joint venture, we can’t say it’s
arbitrary and capricious in its own right (except to the extent that
DOT disqualified Petitioners continuing approval because of the
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25-13546 ROSENBAUM, J., Concurring in the Judgment 5
open-skies problem I discussed earlier). So I do not join the
Majority Opinion’s decision to grant the petition because of DOT’s
failure to conduct as comprehensive an analysis of DOT’s
withdrawal of approval of Petitioners’ joint venture as it did when
it granted the original application for joint venture.