WASHINGTON, Nov 12 (Reuters) - A U.S. appeals court late

on Wednesday temporarily halted a government agency's order to

force Delta Air Lines ( DAL ) and Aeromexico to unwind a joint

venture by January 1.

The airlines had sued to block the U.S. Department of

Transportation order to repeal the nearly nine-year-old joint

venture that lets the carriers coordinate scheduling, pricing

and capacity for U.S.-Mexico flights. The USDOT order was issued

in September as part of several U.S. actions aimed at Mexico's

aviation sector over competition concerns.

The carriers said they faced substantial costs they could

not recover even if a court later upheld the arrangement. The

order from a three-judge panel cited a prior court decision on

the standard for temporarily blocking administrative actions.

Delta said it appreciated "the court's decision to pause the

wind-down of the Delta/Aeromexico strategic partnership while it

reviews the validity of the DOT's order."

Aeromexico in a statement noted the joint venture would

remain in place as the court case proceeds.

USDOT declined to comment.

Last week, the Justice and Transportation Departments called

the joint venture "legalized collusion" that controls "almost

60% of operations at the fourth-largest international gateway to

and from the United States," citing Mexico City flights.

Delta, which has a 20% stake in Aeromexico, has also argued

that President Donald Trump's administration is holding the

joint venture to a stricter standard than other ventures

including United Airlines and ANA.

The government has said anticipated problems from the

venture include higher fares in some markets, reduced capacity

and challenges for U.S. carriers due to inadequate competition.

In separate actions last month, the Trump administration

revoked approval for 13 routes by Mexican carriers into the U.S.

and canceled all combined passenger and cargo flights by Mexican

airlines to the United States from Mexico City's Felipe Angeles

International Airport.

Transportation Secretary Sean Duffy said Mexico "illegally

canceled and froze U.S. carrier flights for three years without

consequences."

Mexican President Claudia Sheinbaum said earlier she

disagrees with the U.S. decision to revoke approval of the 13

routes.