Delta Air Lines plans to raise its stake in Aeromexico’s holding company to 49%.
The estimated $600 million deal would see Delta buy up to an additional 32% of the Mexican carrier.
“This investment will strengthen the airlines’ partnership, provide more travel options for customers in the US and Mexico and deliver the industry’s best customer experience,” the US airline said.
Delta owns 4.1% of Grupo Aeromexico and holds an option to acquire an additional 8.1%. The airline’s pension trust holds options to acquire approximately 4.6% of Aeromexico.
The US carrier plans to start a tender offer once regulatory approvals in Mexico and the US have been obtained.
Delta president, Ed Bastian, said: “This new investment demonstrates Delta’s confidence in Mexico’s future and deepens our relationship with Aeromexico, cementing Delta’s long-term commitment to the customers we serve to, from and through Latin America.”
The two airlines entered into their first codeshare in 1994 followed by an enhanced commercial agreement in 2011.
Delta invested $65 million in shares of Grupo Aeromexico three years ago.
The carriers filed an application with the US Department of Transportation in March seeking anti-trust immunity for a new joint venture on flights between the US and Mexico.
Aeromexico runs a fleet of 120 aircraft operating more than 600 daily flights with its main hub in Mexico City. Its network covers 80 cities on three continents, including 45 destinations in Mexico, 16 in the US, 15 in Latin America, three in Europe, two in Asia and three in Canada.
Both airlines are part of the SkyTeam alliance.