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United States v. US Airways Group, Inc.

United States District Court, D. Columbia.

April 25, 2014

UNITED STATES OF AMERICA, et al., Plaintiffs,
v.
US AIRWAYS GROUP, INC., et al., Defendants

Page 70

For UNITED STATES OF AMERICA, Plaintiff: Mark William Ryan, LEAD ATTORNEY, Katharine Stevens Mitchell-Tombras, Kathleen Suzanne O'neill, William H. Stallings, Ryan J. Danks, United States Department of Justice, Antitrust Division, Washington, DC; Michael D. Billiel, LEAD ATTORNEY, U.S. DEPARTMENT OF JUSTICE, Washington, DC.

For STATE OF ARIZONA, Plaintiff: Nancy M. Bonnell, LEAD ATTORNEY, OFFICE OF THE ARIZONA ATTORNEY GENERAL, Phoenix, AZ; Susan V. Myers, OFFICE OF THE ARIZONA ATTORNEY GENERAL, Antitrust Unit, Phoenix, AZ.

For DISTRICT OF COLUMBIA, Plaintiff: Bennett C. Rushkoff, LEAD ATTORNEY, OFFICE OF THE ATTORNEY GENERAL, Public Advocacy Section, Washington, DC; Nicholas Alan Bush, DC OFFICE OF THE ATTORNEY GENERAL, Washington, DC.

For STATE OF FLORIDA, Plaintiff: Lizabeth A. Brady, LEAD ATTORNEY, FLORIDA OFFICE OF THE ATTORNEY GENERAL, Tallahassee, FL; Christopher R. Hunt, OFFICE OF THE FLORIDA ATTORNEY GENERAL, Tallahassee, FL.

For COMMONWEALTH OF PENNSYLVANIA, Plaintiff: James A. Donahue , III, LEAD ATTORNEY, OFFICE OF THE ATTORNEY GENERAL, Antitrust Section, Harrisburg, PA; Jennifer Ann Thomson, OFFICE OF THE ATTORNEY GENERAL, Commonwealth of Pennsylvania, Harrisburg, PA.

For STATE OF TENNESSEE, Plaintiff: Victor J. Domen , Jr., LEAD ATTORNEY, TENNESSEE ATTORNEY GENERAL'S OFFICE, Nashville, TN.

For COMMONWEALTH OF VIRGINIA, Plaintiff: Sarah Oxenham Allen, LEAD ATTORNEY, Matthew Ryan Hull, OFFICE OF THE ATTORNEY GENERAL, Consumer Protection Section, Richmond, VA.

For STATE OF MICHIGAN, Plaintiff: D. J. Pascoe, LEAD ATTORNEY, MICHIGAN DEPARTMENT OF ATTORNEY GENERAL, Corporate Oversight Division, Lansing, MI.

For U.S. AIRWAYS GROUP INC, Defendant: Richard G. Parker, LEAD ATTORNEY, Courtney B. Dyer, Henry C. Thumann, Katrina M. Robson, O'MELVENY & MYERS, LLP, Washington, DC; Steven Gill Bradbury, LEAD ATTORNEY, Gorav Jindal, Paul T. Denis, Paul H. Friedman, DECHERT LLP, Washington, DC; Andrew J. Forman, Charles F Rule, Daniel J. Howley, CADWALADER, WICKERSHAM & TAFT LLP, Washington, DC; Kenneth R. O'Rourke, O'MELVENY & MYERS LLP, Los Angeles, CA.

For AMR CORPORATION, Defendant: John M. Majoras, LEAD ATTORNEY, JONES DAY, Columbus, OH; Mary Jean Moltenbrey, LEAD ATTORNEY, PAUL HASTINGS LLP, Washington, DC; Paula W. Render, LEAD ATTORNEY, JONES DAY, Chicago, IL; Christopher N. Thatch, John Bruce McDonald, Michael S. Fried, JONES DAY, Washington, DC; Rosanna K McCalips, JONES DAY, Business and Tort Litigation, Washington, DC; Scott Mitchell Flicker, PAUL, HASTINGS, JANOFSKY & WALKER, L.L.P., Washington, DC.

For STATE OF OKLAHOMA, Movant: Patrick R. Wyrick, LEAD ATTORNEY, ATTORNEY GENERAL OF OKLAHOMA, Oklahoma City, OK.

For CAROLYN FJORD, KATHERINE ARCELL, KEITH DEAN BRADT, JOSE M. BRITO, ROBERT D. CONWAY, JAN MARIE BROWN, ROSEMARY D'AUGUSTA, BRENDA KAY DAVIS, PAMELA FAUST, DON FREELAND, DONALD FRY, GABRIEL GARAVANIAN, HARRY GARAVANIAN, YVONNE GARDNER, LEE GENTRY, VALARIE JOLLY, GAIL KOSACH, JUDY CRANDELL, MICHAEL C. MALANEY, LEN MARAZZO, LISA MCCARTHY, Movants: Theodore Frank Schwartz, LEAD ATTORNEY, Clayton, MO.

For AMERICAN ANTITRUST INSTITUTE, Movant: Phillip Craig Zane, LEAD ATTORNEY, GEYERGOREY LLP, Washington, DC.

For ALLIED PILOTS ASSOCIATION, Amicus: Filiberto Agusti, Robert Wallace Fleishman, Shannen W. Coffin, LEAD ATTORNEYS, STEPTOE & JOHNSON, L.L.P., Washington, DC; Darin M. Dalmat, Edgar N. James, JAMES & HOFFMAN, P.C., Washington, DC.

For ASSOCIATION OF PROFESSIONAL FLIGHT ATTENDANTS, Amicus: Robert S. Clayman, LEAD ATTORNEY, N. Skelly Harper, GUERRIERI, CLAYMAN, BARTOS & PARCELLI, P.C., Washington, DC.

For ASSOCIATION OF FLIGHT ATTENDANTS-CWA, Amicus: Edward James Gilmartin, LEAD ATTORNEY, ASSOCIATION OF FLIGHT ATTENDANTS-CWA, Washington, DC.

For TRANSPORT WORKERS UNION OF AMERICA, Amicus: Jeffrey Blumenfeld, LEAD ATTORNEY, LOWENSTEIN SANDLER, LLP, Washington, DC; Richard S. Edelman, LEAD ATTORNEY, O'DONNELL, SCHWARTZ, AND ANDERSON, Washington, DC; Sharon L. Levine, LEAD ATTORNEY, PRO HAC VICE, LOWENSTEIN SANDLER LLP, Roseland, NJ.

For OFFICIAL COMMITTEE OF UNSECURED CREDITORS, Amicus: Albert L. Hogan , III, John Wm Butler , Jr., LEAD ATTORNEYS, PRO HAC VICE, SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP, Chicago, IL; Gregory Bestor Craig, LEAD ATTORNEY, SKADDEN ARPS SLATE MEAGHER & FLOM LLP, Washington, DC; James A. Keyte, Jay M. Goffman, Kenneth B. Schwartz, LEAD ATTORNEYS, PRO HAC VICE, SKADDEN, ARPS, SLATE, MEAGHER & FLOM, LLP, New York, NY.

For COMMUNICATIONS WORKERS OF AMERICA, AFL-CIO, Amicus: Mary Katherine O'Melveny, LEAD ATTORNEY, COMMUNICATIONS WORKERS OF AMERICA, Legal Department, Washington, DC.

For DALLAS/FORT WORTH INTERNATIONAL AIRPORT BOARD, CITY OF CHARLOTTE - CHARLOTTE DOUGLAS INTERNATIONAL AIRPORT, CITY OF PHILADELPHIA, CITY OF PHOENIX - PHOENIX SKY HARBOR INTERNATIONAL AIRPORT, Amici: David H. Bamberger, LEAD ATTORNEY, DLA PIPER LLP (U.S.), Washington, DC.

For CHARLOTTE CHAMBER OF COMMERCE, CHICAGOLAND CHAMBER OF COMMERCE, DALLAS REGIONAL CHAMBER, FORT WORTH CHAMBER OF COMMERCE, GREATER PHILADELPHIA CHAMBER OF COMMERCE, GREATER PHOENIX CHAMBER OF COMMERCE, Amici: Michael Deuel Sullivan, WILKINSON BARKER KNAUER, LLP, Washington, DC.

For ONEWORLD ALLIANCE, LLC, Amicus: Douglas W. Baruch, LEAD ATTORNEY, FRIED, FRANK, HARRIS, SHRIVER & JACOBSON LLP, Washington, DC.

For U.S. AIRLINE PILOTS ASSOCIATION, Amicus: Kevin Clark Maclay, LEAD ATTORNEY, CAPLIN & DRYSDALE, Washington, DC.

For SOUTHWEST AIRLINES CO., Amicus: Alden Lewis Atkins, LEAD ATTORNEY, VINSON & ELKINS, LLP, Washington, DC.

For VIRGIN AMERICA INC, Amicus: J. Robert Robertson, LEAD ATTORNEY, HOGAN LOVELLS U.S. LLP, Washington, DC.

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MEMORANDUM OPINION

COLLEEN KOLLAR-KOTELLY, UNITED STATES DISTRICT JUDGE.

Presently before the Court is the United States' [161] Motion for Entry of the Proposed Final Judgment. Upon consideration of the pleadings [1], the relevant legal authorities, and the record as a whole, the Court GRANTS the United States' Motion for Entry of the Proposed Final Judgment.

I. BACKGROUND

At the time of the filing of the Complaint in this litigation, Defendant U.S. Airways was a Delaware corporation headquartered in Tempe, Arizona. CIS at 3. In the year 2012, it flew over fifty million passengers to approximately 200 locations worldwide, taking in more than $13 billion in revenue. Id. American Airlines was a Delaware corporation headquartered in Fort Worth, Texas. Id. Defendant AMR Corporation was the parent company of American Airlines. Id. In the year 2012, American flew over eighty million passengers

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to approximately 250 locations worldwide, taking in more than $24 billion in revenue. Id. U.S. Airways and AMR Corporation agreed to merge on February 13, 2013. Id. at 4.

On August 13, 2013, the United States and the States of Arizona, Florida, Tennessee, and Texas, the Commonwealths of Pennsylvania and Virginia, and the District of Columbia filed a civil antitrust Complaint seeking to enjoin the proposed merger of Defendants.[2] See Complaint, ECF No. [1]. The initial Complaint, as well as the Amended Complaint [3] filed on September 5, 2013, alleged that the likely effect of this merger would be to lessen competition substantially for the sale of scheduled air passenger service in city pair markets throughout the United States, and in the market for takeoff and landing authorizations (" slots" ) at Ronald Reagan Washington National Airport (" Reagan National" ) in violation of Section 7 of the Clayton Act as amended, 15 U.S.C. § 18. See Am. Compl. ¶ 96. The Court subsequently set a trial date of November 25, 2013. See Order, ECF No. [56].

On November 12, 2013, the parties reached a settlement, and the United States filed a proposed Final Judgment designed to remedy the harm to competition that was likely to result from the proposed merger. The proposed Final Judgment requires the divestiture of slots, gates, and ground facilities at seven airports around the country. CIS at 2-3. Specifically, the Defendants are required to divest or transfer to purchasers approved by the United States, in consultation with the Plaintiff States:

o 104 air carrier slots [4] at Reagan National (i.e., all of American's pre-merger air carrier slots) and rights and interests in any associated gates or other ground facilities, up to the extent such gates and ground facilities were used by Defendants to support the use of the divested slots;
o 34 slots at New York LaGuardia International Airport (" LaGuardia" ) and rights and interests in any associated gates or other ground facilities, up to the extent such gates and ground facilities were used by Defendants to support the use of the divested slots; and
o Rights and interests to two airport gates and associated ground facilities at each of the following airports: Chicago O'Hare International Airport (" O'Hare" ), Los Angeles International Airport (" LAX" ), Boston Logan International Airport (" Boston Logan" ), Miami International Airport (" Miami International" ), and Dallas Love Field.

Id. at 2-3. The United States argues that this remedy permits the entry or expansion

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of airlines that can provide meaningful competition in numerous markets, eliminates the significant increase in concentration of slots at Reagan National that otherwise would have occurred, and enhances the ability of low-cost carriers to compete with legacy carriers on a system-wide basis. The subject slots and facilities have been or are in the process of being divested to several airlines, specifically Southwest Airlines, JetBlue Airways, and Virgin America. Gov't Resp. at 7.

In addition to the relief provided by the proposed Final Judgment, Defendants reached an agreement with the Plaintiff States to maintain service from at least one of the merged airline's hubs to specified airports in the Plaintiff States for a period of five years. Supplemental Stipulated Order, ECF No. [151] at 4-6. Defendants also reached an agreement with the United States Department of Transportation to use all of the merged airline's commuter slots (as opposed to air carrier slots) at Reagan National to serve airports designated as medium, small and non-hub airports (i.e. airports accounting for less than one percent of annual passenger boardings) for a period of at least five years. See Gov't Resp. at 8 & n. 11.

Pursuant to the requirements of the Antitrust Procedures and Penalties Act (" APPA" or " Tunney Act" ), 15 U.S.C. § 16(b)-(h), the United States published the proposed Final Judgment and the accompanying Competitive Impact Statement (" CIS" ) in the Federal Register on November 27, 2013. See 78 Fed. Reg. 71377. The United States also had summaries of the terms of the proposed Final Judgment and CIS, together with directions for submission of written comments relating to the proposed Final Judgment, published in the Washington Post, Dallas Morning News, and Arizona Republic for seven days, beginning on November 25, 2014, and ending on December 9, 2013. Gov't Resp. at 4. The sixty-day period for public comment on the proposed Final Judgment ended on February 7, 2014. Id. The United States received a total of fourteen comments by the deadline. Id. The United States received an additional fifteen e-mails from individuals expressing concerns about competition that were sent through means other than those designated for submitting comments under the Tunney Act. Id. at 2 n. 1. On March 10, 2014, the United States filed with the Court its [159] Response to Public Comments on the Proposed Final Judgment along with the public comments and e-mails that it received. This filing responds to both the comments and the e-mails the United States received. Pursuant to 15 U.S.C. § 16(d), and with the Court's authorization, see Order, ECF No. [154] at 2-3, the United States posted the comments and its Response to Comments on the Antitrust Division's website. See U.S. Department of Justice: Antitrust Division, U.S. and Plaintiff States v. U.S. Airways Group, Inc. and AMR Corporation, http://www.justice.gov/atr/cases/usairways/index.html (last visited Apr. 25, 2014). On March 13, 2014, the United States published in the Federal Register its Response to Public Comments on the Proposed Final Judgment and the location on the Antitrust Division's website at which the comments are accessible. See 79 Fed. Reg. 14279.

Because Defendant AMR Corporation was in bankruptcy at the time of the settlement, the parties' agreement also required approval by the bankruptcy court. Gov't Resp. at 3. On November 27, 2013, the United States Bankruptcy Court for the Southern District of New York entered an order finding that the settlement satisfied the requirements for approval under the Bankruptcy Code, granted AMR's motion to consummate the merger, and denied

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a request for a temporary restraining order filed by a private plaintiff seeking to enjoin the merger on antitrust grounds. See Order Pursuant to Bankruptcy Rule 9019(a) Approving Settlement Between Debtors, U.S. Airways, Inc. and United States Department of Justice, In re AMR Corp., 502 B.R. 23 (Bankr. S.D.N.Y. 2013), ECF No. 11321. AMR exited bankruptcy protection, and the merger closed on December 9, 2013. Gov't Resp. at 3. The Bankruptcy Court has retained jurisdiction to hear the private case. Fjord v. AMR Corp., ( In re AMR Corp. ) Adv. Pr. No. 13-01392 (Bankr. S.D.N.Y. filed Aug. 6, 2013).

On March 13, 2014, the United States filed with this Court the present Motion for Entry of the Proposed Final Judgment. Alongside this motion, the United States filed a [161-2] Certificate of Compliance which states that all of the requirements of the APPA have been satisfied. After receiving this motion along with the accompanying certification, the Court left the record in this case open for an additional twenty-one days until 5:00 PM on April 3, 2014, in order to allow filings by parties seeking to lodge additional comments prior to the Court's decision on the proposed Final Judgment. See Order, ECF No. [162] at 2.

On April 1, 2014, the American Antitrust Institute (" AAI" ) sought leave to file an amicus brief in reply to the United States' response to the public comments on the proposed Final Judgment. See Unopp. Mot. of the Am. Antitrust Inst. for Leave to File Brief as Amicus Curiae to Reply to the Response of Pl. United States to Public Comments on the Proposed Final Judgment, ECF No. [163] (" AAI Mot." ). On April 4, 2014, a group of consumers and travel professionals (the " Fjord amici" ) also sought leave to participate as amici, attaching a proposed brief replying to the United States' response to public comments. See Unopp. Mot. for Leave to File Brief Amici Curiae by Carolyn Fjord, et al., and in Opp. to Pl.'s Mot. for Entry of Final Judgment and for a Hearing on the Proposed Final Judgment, ECF No. [165] (" Fjord Mot." ). The parties do not oppose either group's participation as amici. AAI Mot. at 2; Fjord Mot. at 2. In light of this Court's " inherent authority" to permit amici participation, Jin v. Ministry of State Sec., 557 F.Supp.2d 131, 136 (D.D.C. 2008), the Court will grant AAI leave to file its amicus brief. In addition, although the Fjord amici filed their brief after the Court's deadline and provide no explanation for this delay, the Court will nevertheless grant the motion and consider their brief in light of the fact that their participation is unopposed and in the interests of considering all available information. Accordingly, by separate Order issued this day, the Court grants both AAI and the Fjord amici leave to file their briefs. See Order, ECF No. [167].

In addition, on March 11, 2014, the Court Clerk's Office received an e-mail to its online suggestion box from a private citizen who objected to the settlement on the grounds that it was insufficient to counteract the alleged anticompetitive harms of the merger. A redacted version of this e-mail has been placed on the docket. See Order, ECF No. [166].

II. LEGAL STANDARD

The Clayton Act, as amended by the APPA, requires that proposed consent judgments in antitrust cases brought by the United States be subject to a sixty-day comment period, after which the court shall determine whether entry of the proposed Final Judgment " is in the public interest." 15 U.S.C. § 16(e)(1). In making that determination, the court, in accordance

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with the statute as amended in 2004, is required to consider:

(A) the competitive impact of such judgment, including termination of alleged violations, provisions for enforcement and modification, duration of relief sought, anticipated effects of alternative remedies actually considered, whether its terms are ambiguous, and any other competitive considerations bearing upon the adequacy of such judgment that the court deems necessary to a determination of whether the consent judgment is in the public interest; and
(B) the impact of entry of such judgment upon competition in the relevant market or markets, upon the public generally and individuals alleging specific injury from the violations set forth in the complaint including consideration of the public benefit, if any, to be derived from a determination of the issues at trial.

Id. A court must engage in an independent determination of whether the proposed consent judgment is in the public interest. United States v. Microsoft, 56 F.3d 1448, 1458, 312 U.S.App.D.C. 378 (D.C. Cir. 1995). Nevertheless, the court's inquiry is limited, as the United States is entitled to " broad discretion to settle with the defendant within the reaches of the public interest." Id. at 1461. " With respect to the adequacy of the relief secured by the decree, a court may not 'engage in an unrestricted evaluation of what relief would best serve the public.'" United States v. Graftech Int'l, No. 10-cv-2039, 2011 WL 1566781, at *12 (D.D.C. Mar. 24, 2011) (quoting United States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988)). Accordingly " a district court is not permitted to reject proposed remedies merely because the court believes other remedies are preferable." United States v. SBC Commc'ns, Inc., 489 F.Supp.2d 1, 15 (D.D.C. 2007) (citation omitted). See also United States v. Republic Servs., Inc., 723 F.Supp.2d 157, 160 (D.D.C. 2010) (finding that " [i]n light of the deferential review to which the government's proposed remedy is accorded, [amicus curiae's] argument that an alternative remedy may be comparably superior, even if true, is not a sufficient basis for finding that the proposed final judgment is not in the public interest" ). " [A] proposed decree must be approved even if it falls short of the remedy the court would impose on its own, as long as it falls within the range of acceptability or is within the reaches of public interest." United States v. AT& T, 552 F.Supp. 131, 151 (D.D.C. 1982) (citation omitted).

" Such a rule is justified because '[r]emedies which appear less than vigorous may well reflect an underlying weakness in the government's case, and for the district judge to assume that the allegations in the complaint have been formally made out is quite unwarranted.'" SBC Commc'ns, Inc., 489 F.Supp.2d at 15 (quoting Microsoft, 56 F.3d at 1461). " Moreover, room must be made for the government to grant concessions in the negotiation process for settlements." Id. (citing Microsoft, 56 F.3d at 1461 (" it could also be that this was a concession the government made in bargaining." )). Nor in making this assessment is the court " tasked with deciding whether [the] merger[] as a whole run[s] afoul of the antitrust laws." Id. at 3. Rather, a court must simply determine " whether there is a factual foundation for the government's decisions such that its conclusions regarding the proposed settlements are reasonable." Id. at 15-16. See also United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981) (" The court's role in protecting the public interest is one of insuring that the government has not breached its duty to the public in consenting to the decree." ).

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In making this determination the court " must accord deference to the government's predictions about the efficacy of its remedies, and may not require that the remedies perfectly match the alleged violations . . . ." SBC Commc'ns, Inc., 489 F.Supp.2d at 17. See also Microsoft, 56 F.3d at 1461 (noting the need for courts to be " deferential to the government's predictions as to the effect of the proposed remedies" ); United States v. Archer-Daniels-Midland Co., 272 F.Supp.2d 1, 6 (D.D.C. 2003) (noting that " [a] district court must accord due respect to the government's prediction as to the effect of proposed remedies, its perception of the market structure, and its view of the nature of the case" ). As other courts of this district have noted, " it is improper for a court to require a proposed settlement to perfectly remedy antitrust violations when those violations have not yet been proven at trial, and when the government needs room to negotiate a settlement." SBC Commc'ns, Inc., 489 F.Supp.2d at 16. An imperfect match between the remedy and alleged violations may " only reflect underlying weakness in the government's case or concessions made during negotiation." Id. at 17.

" Moreover, the court's role under the APPA is limited to reviewing the remedy in relationship to the violations that the United States has alleged in its Complaint . . . ." Graftech, 2011 WL 1566781, at *13. A court may not " construct [its] own hypothetical case and then evaluate the decree against that case." Microsoft, 56 F.3d at 1459. Because the " court's authority to review the decree depends entirely on the government's exercising its prosecutorial discretion by bringing a case in the first place," it follows that " the court is only authorized to review the decree itself," and not to " effectively redraft the complaint" and inquire into matters that the United States did not pursue. Id. at 1459-60. Indeed, a court " cannot look beyond the complaint in making the public interest determination unless the complaint is drafted so narrowly as to make a mockery of judicial power." SBC Commc'ns, 489 F.Supp.2d at 15.

A court is not required to hold an evidentiary hearing or to permit intervenors as part of its review under the Tunney Act. Id. at 10 (citing 15 U.S.C. § 16(e)(2)). A court can make its public interest determination based on the competitive impact statement and response to public comments alone. United States v. Enova Corp., 107 F.Supp.2d 10, 17 (D.D.C. 2000).

III. DISCUSSION

A. Harm Alleged from Merger

The Complaint sets out several harms to competition that would result from the merger of Defendants. First, and most obviously, the merger would eliminate two independent competitor airlines, ending head-to-head competition between U.S. Airways and American on numerous nonstop and connecting routes. Am. Compl. ¶ 82.

Second, the merger of Defendants would leave the market with three similar " legacy" airlines -- Delta, United, and the merged airline. Id. ¶ 3. These three carriers would have extensive national and international networks, connections to hundreds of destinations, established brand names, and strong frequent flyer mile programs. Id. ¶ 32. By contrast, other carriers such as Southwest Airlines, JetBlue Airways, Virgin America, Frontier Airlines, and Spirit Airlines, which the United States refers to in the CIS as " low-cost carriers" or " LCCs" , lack the extensive networks of the legacy airlines. Id. The Complaint alleged that by reducing the

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number of legacy airlines from four to three and by aligning the economic incentives of these remaining airlines, the merger would render it easier for the remaining legacy airlines to cooperate, rather than compete, on price and service. Id. ¶ ¶ 41-46, 71-81. In the absence of the merger, both U.S. Airways and American had indicated their intent to disrupt such coordination among legacy carriers. U.S. Airways' network structure provided it the incentive to offer an " Advantage Fares" program, through which it offered discounts over other airlines' nonstop fares with its own cheaper connecting service. Id. ¶ ¶ 48-58. Similarly, upon emerging from bankruptcy, American was expected to undertake significant growth at the expense of its competitors. Id. ¶ ¶ 68-70. The merger casts into doubt these existing or expected disruptive strategies. Accordingly, the Complaint expressed concern that the merger would shift the airline market to a tighter oligopoly with coordinated pricing among the remaining legacy airlines.

Third, the Complaint alleged that the merger would entrench the merged airline as the dominant carrier at Reagan National, where it would control sixty-nine percent of

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the take-off and landing slots. Id. ¶ 83. According to the United States, the merger would effectively foreclose entry or expansion by other airlines that might increase competition at Reagan National. Id. ¶ ¶ 84-86.

In addition to laying out the potential harms from the merger, the Complaint also explained that new entry or expansion by existing competitors to the legacy airlines would be unlikely to prevent or remedy these anticompetitive effects. Id. ¶ ¶ 91-94. Although LCCs offer important competition to the legacy airlines, they have less extensive networks than legacy carriers and face several barriers to entry and expansion. For example, four of the busiest airports in the country -- Reagan National, LaGuardia, John F. Kennedy International, and Newark Liberty International -- are subject to slot limitations governed by the FAA. The lack of availability of slots is a substantial barrier to entry at these airports. Slots at these airports are concentrated in the hands of legacy airlines that have little incentive to sell or lease slots to LCCs -- the carriers most likely to compete aggressively against them. According to the United States, slots are expensive, difficult to obtain, and change hands only rarely. There are no alternatives to slots for airlines seeking to enter or expand their service at Reagan National. LCC expansion is also stymied by limited access to gates. At several large airports, a significant portion of the available gates are leased to established airlines under long-term exclusive-use leases. In such cases, a carrier seeking to expand or enter would have to sublease gates from incumbent airlines. The Complaint expressed concern that because of these high barriers to entry and expansion, LCCs would be unlikely to counteract the anticompetitive effects of the merger.

B. Review of Final Judgment

The Final Judgment seeks to address both the harm resulting from increased slot concentration at Reagan National and the broader harms alleged in the Complaint by requiring the divestiture of facilities at seven important airports -- Reagan National, LaGuardia, O'Hare, LAX, Boston Logan, Miami International, and Dallas Love Field -- including substantial divestitures at Reagan National and LaGuardia.

As an initial matter, the divestiture of slots at Reagan National addresses the localized competitive concern at this airport. Gov't Resp. at 11. Prior to the divestitures, LCCs held only six percent of the take-off-and landing slots at this airport. Id. The Final Judgment transfers an additional twelve percent of slots to LCCs, which constitutes all of Defendant American's preexisting air carrier slots at Reagan National. Id. In addition, LCCs will also enjoy a substantially increased presence at LaGuardia, where they held less than ten percent of the slots prior to the divestitures. Id.

Similarly, although the Final Judgment does not create a new independent competitor nor replicate American's capacity expansion plans nor affirmatively preserve the Advantage Fares program, the United States predicts that it will impede the airline industry's evolution toward a tighter oligopoly. Id. at 8-9. The proposed Final Judgment significantly eases the high barriers to LCC entry and expansion identified in the Complaint by providing these non-legacy airlines access to strategically important and slot-constrained airports. Id. at 11. The United States argues that access to these key airports made possible by the divestitures will create otherwise unavailable network opportunities for the purchasing LCCs. LCCs will not only use these slots and gates to add new routes, but will incorporate these new routes into their existing networks, making them more significant competitors to the remaining legacy airlines. Id. at 15. The United States admits that the remedy does not eliminate all entry barriers faced by LCCs. Id. at 15 n. 28. However, because LCCs have shown some ability to overcome other disadvantages with the help of lower costs, the United States expects that the network-wide strengthening brought about by the divestitures will, over time, help the LCCs overcome some of the other obstacles that limit their ability to expand. Id. Accordingly, the United States predicts that these divestitures to LCCs will provide increased incentives for these carriers to invest in new capacity and to expand into additional markets, providing more meaningful competition system-wide to legacy carriers.

In making its predictions about the disruptive tendencies of LCC entry or expansion, the United States relies on past experience and research. Previous work by both the Department of Justice and academics has shown that the presence of an LCC on a nonstop route results in substantial price reductions and capacity increases. Id. at 9 n. 13 (citing Jan K. Brueckner et al., Airline Competition and Domestic U.S. Airfares: A Comprehensive Reappraisal, 2 Econ. Transp. 1-17 (2013); Phillippe Alepin et al., Segmented Competition in Airlines: The Changing Role of Low-Cost and Legacy Carriers in Fare Determination, (working paper), available at http://papers.ssrn.com/sol3/papers.cfm?abstract id=2212860; Martin Dresner et al., The Impact of Low Cost Carriers on Airport and Route Competition, 30 J. of Transp. Econ & Pol'y 309-328 (1996); Steven A. Morrison, Actual, Adjacent, and Potential Competition: Estimating the Full Effect of Southwest Airlines, 35 J. of Transp. Econ & Pol'y 239-256 (2001)). In addition, the United States also relies on past instances where LCCs gained access to slot-constrained airports. Id. at 9-11. In 2010, in response to the United States' concerns regarding competitive effects of the proposed United/Continental merger, United and Continental transferred thirty-six slots, three gates and other facilities at Newark Liberty International Airport to Southwest. Id. at 9-10. Southwest used those assets to establish service on six nonstop routes from Newark, resulting in substantially lower fares to consumers. For example, average fares for travel between Newark and St. Louis dropped twenty-seven percent and fares for travel between Newark and Houston dropped fifteen percent. In addition, through these

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additional Newark routes, Southwest established connecting service to approximately sixty additional cities throughout the United States, strengthening its larger network through the acquisition of assets at a single airport.

Here, the Final Judgment will require the divestiture of many more slots, gates, and additional facilities than were divested during the United/Continental merger. The United States expects that these substantial divestitures will significantly strengthen the purchasing carriers, providing the incentive and ability for these LCCs to invest in new capacity and provide legitimate competition to the remaining legacy carriers nationwide. Just as Southwest was able to offer service on sixty routes through the addition of six nonstop flights from Newark, the United States expects a similar (and larger) multiplier effect with the divestitures here.

The United States also points to past experience from the entry of JetBlue into Reagan National as evidence that divesting assets to LCCs will reduce the anticompetitive effects of Defendants' merger. Id. at 10-11. Prior to the current divestiture, JetBlue had only had a limited number of slots at Reagan National. Nevertheless, it used these limited slots to drive down fares and increase output on the routes it did serve. For example, after JetBlue began service from Reagan National to Boston in 2010, average fares dropped by thirty-nine percent and passengers nearly doubled. Indeed, U.S. Airways estimated that after JetBlue's entry, the last-minute fare for round-trip travel between Reagan National and Boston dropped by over $700. Id. (citing Am. Compl. ¶ 88).

Evaluating the proposed Final Judgment under the limited standard appropriate under the Tunney Act, the Court finds that the settlement agreement is " within the reaches of the public interest." Microsoft, 56 F.3d at 1461. The United States has provided a reasonable basis for concluding that the settlement will mitigate the anticompetitive effects of combining two of the remaining legacy airlines. In addition to reducing slot concentration at Reagan National, the settlement provides LCCs with substantial assets at key airports. The United States predicts, based on past research and experience, that providing LCCs with these otherwise unavailable opportunities will create incentives for LCCs to invest in new capacity, expand into new markets, and provide more meaningful system-wide competition to the three remaining legacy airlines, impeding the shift to oligopoly in the airline market. Specifically, the United States predicts that Southwest, JetBlue, and Virgin America's acquisition of slots at Reagan National and LaGuardia will allow them to provide greatly expanded service on numerous routes, including new nonstop and connecting service to points throughout the country. Similarly, gate divestitures at O'Hare, LAX, Boston Logan, Miami International, and Dallas Love Field will expand the presence of these potentially disruptive competitors at strategically important airports. Through these divestitures, the United States believes, LCCs will establish stronger positions at strategically important destinations where obtaining access has been especially difficult due to legacy airline entrenchment. At the same time, these LCCs will have new incentives to invest in new capacity and generate additional passenger demand. These predictions, which are founded on past experience and research, are entitled to the Court's deference. See Microsoft, 56 F.3d at 1461 (noting the need for courts to be " deferential to the government's predictions as to the effect of the

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proposed remedies" ); Archer-Daniels-Midland, 272 F.Supp.2d at 6 (noting that " [a] district court must accord due respect to the government's prediction as to the effect of proposed remedies, its perception of the market structure, and its view of the nature of the case" ).

None of the remaining Tunney Act factors suggest a different conclusion. As discussed, in reviewing the proposed Final Judgment, the Court must also consider additional factors besides those relating to competitive concerns in the relevant market. First, the Court must address " anticipated effects of alternative remedies actually considered." 15 U.S.C. § 16(e)(1)(A). As an alternative to the Final Judgment, the United States considered a full trial on the merits against the Defendants in which the United States would have sought an injunction against the merger. CIS at 16. The Final Judgment avoids the time, expense, and particularly the uncertainty of a full trial on the merits. " Success at trial was surely not assured, so pursuit of that alternative may have resulted in no remedy at all. While a trial may have created an even greater evidentiary record, that benefit may not outweigh the possible loss of the settlement remedies." SBC Commc'ns, 489 F.Supp.2d at 23. See also 15 U.S.C. § 16(e)(1)(B) (requiring " consideration of the public benefit, if any, to be derived from a determination of the issues at trial" ).

The Court also finds no cause for concern in the proposed settlement's " provisions for enforcement and modification." Id. § 16(e)(1)(A). " The proposed final judgment[] contain[s] standard provisions that maintain the Court's jurisdiction and en[s]ure compliance with the decrees as entered." SBC Commc'ns, 489 F.Supp.2d at 24. The Court retains jurisdiction over this action for ten years to enable any party to apply for further orders necessary to carry out, construe, modify, ensure, enforce, or punish violations of the proposed Final Judgment. PFJ § § XV, XVI. In addition, to ensure that all necessary actions are being taken by Defendants, the Final Judgment permits the United States, in consultation with the Plaintiff States and with the Court's approval, to appoint a Monitoring Trustee. Id. § VII. Defendants are further required to submit affidavits to the United States describing their efforts to comply with the Final Judgment. Id. § X. Finally, the Final Judgment empowers the United States to investigate compliance with the agreement through such means as inspection of documents, interviews, and written discovery. Id. § XI. Taken together, the Court finds that these enforcement and modification provisions are appropriate. See SBC Commc'ns, 489 F.Supp.2d at 24 (finding largely identical provisions " adequate . . . for the enforcement and modification of the final judgments." ).

Finally, the Court must also consider " whether [the proposed final judgment's] terms are ambiguous." 15 U.S.C. § 16(e)(1)(A). Based on the Court's review, the proposed Final Judgment is sufficiently clear, as it clearly and specifically describes the assets to be divested, how these divestitures will be made, the circumstances in which modifications may be made, and how the Final Judgment can be enforced. As the Court addresses, infra, objections to the contrary are unavailing.

C. Objections to Final Judgment

The objections filed during the public comment period and by amici do not dissuade the Court from the view that the settlement is within the reaches of the public interest. The Court addresses these objections below.

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1. Failure to Remedy Harms Alleged

First, several commenters and both amici contend that the proposed Final Judgment fails to fully resolve the harms alleged in the Complaint. See, e.g., AAI Amicus Brief at 8-17; Fjord Amicus Brief at 10-16. They argue that new LCC entry fostered by the divestitures will not neutralize all of the competitive losses in all of the city pair markets that might be affected by the merger. In this respect, these commenters and amici question the competitive significance and long-term impact of LCC entry on fares and services. One commenter (Delta) specifically questions whether LCCs will provide significant competition to legacy carriers for business travelers. Gov't Resp., Appendix, Att. 6 (Comments of Delta Airlines, Inc.) at 20-24. In addition, AAI argues that the divestitures are not of a significant scope to remedy the anticompetitive harms from the merger. AAI Amicus Brief at 8-13. Relatedly, commenters also point to the settlement's failure to preserve U.S. Airways' Advantage Fares program and specifically maintain competition on each city pair route on which Defendants provided competing service. Fjord Amicus Brief at 10-12. The Court finds these objections unavailing.

The United States has provided significant evidence to support its prediction that LCCs will provide meaningful and effective competition through their acquisition of the divested assets. As an initial matter, the United States provides evidence that LCCs are not limited to leisure travelers and do compete with legacy carriers for business travelers. See Gov't Resp. at 24 (" Southwest, the largest LCC, has reported that approximately 35% of its passengers are travelling on business and that corporate sales are increasing." ); id. (noting that JetBlue " provides frequent service on the business routes that it flies." ); id. at 25 (" Virgin America also caters to business passengers, billing its flights to corporate travel customers as 'your corner office in the sky.'" ). Moreover, in support of its predictions of LCC entry and expansion, the United States points to the scope of the divestitures here as well as past evidence of the effect of LCC entry on fares. Id. at 8-15. Although AAI argues that the divestitures are too small in scope to provide the gains the United States hopes, the United States provides evidence of the significant impact of previous, smaller-scale divestitures to LCCs. In addition, as noted, the " [t]he Court must accord deference to the government's predictions about the efficacy of its remedies . . . ." SBC Commc'ns, Inc., 489 F.Supp.2d at 17. And as discussed, supra, the United States has provided a reasonable basis for its predictions of LCC entry and expansion through receipt of the divested assets. The Court notes, as an additional matter, that none of the LCCs have objected to the settlement on the grounds that it is insufficient to remedy the anticompetitive effects of the merger.

Amici attempt to undermine the United States' predictions by pointing to evidence after the parties entered into the settlement. See, e.g., AAI Amicus Brief at 5; Fjord Amicus Brief at 3-5. For example, in order to show that the United States' predictions are inaccurate, AAI points to statements by Southwest's Senior Vice President and CFO that Southwest " continue[s] to have a disciplined growth strategy, with flat year-over-year capacity in 2014." AAI Amicus Brief at 5. AAI argues that this statement shows that the United States is misguided in predicting that Southwest will use the opportunities provided by the divestitures to expand its network and reduce the anticompetitive harm of the merger. The Court disagrees. First, Southwest is only one of the LCCs receiving the divested assets.

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Moreover, the Court is skeptical that the brief statements cited by AAI, standing alone, significantly undercut the United States' predictions. In addition, the Court is not reviewing the reasonableness of the United States' decision in hindsight based on ex post facto statements. Rather, " the relevant inquiry is whether the United States' conclusion about the adequacy of the . . . divestiture was reasonable, not whether it was correct." United States v. Abitibi-Consolidated, Inc., 584 F.Supp.2d 162, 166 (D.D.C. 2008) (" The United States has provided a factual basis for concluding that the . . . divestiture was reasonably adequate to eliminate the merged firm's incentive to close capacity strategically. Irrespective of whether that conclusion [was] correct, the United States has established an 'ample foundation for [its] judgment call' and thus shown 'its conclusion [was] reasonable.'" ) (quoting Microsoft, 56 F.3d at 1461).

As an additional matter, despite the objections of commenters and amici, perfect matching between remedies and alleged violations is not required for Tunney Act approval. " [I]t is improper for a court to require a proposed settlement to perfectly remedy antitrust violations when those violations have not yet been proven at trial, and when the government needs room to negotiate a settlement." SBC Commc'ns, Inc., 489 F.Supp.2d at 16. In arguing that every aspect of the Complaint must be satisfied in the settlement, the commenters and amici presume that the United States would have succeeded at trial in obtaining all the relief it sought in the Complaint. Yet, when undertaking Tunney Act review, the Court must keep in mind that " [r]emedies which appear less than vigorous may well reflect an underlying weakness in the government's case, and for the district judge to assume that the allegations in the complaint have been formally made out is quite unwarranted." Microsoft, 56 F.3d at 1461.

2. Loss of Specific Routes

Next, several commenters object to the loss of specific routes flown by Defendants, which they argue will cease under the merged airline. Specifically, Delta and several members of Congress argue that only legacy carriers provide service to small and medium-sized communities, and that the loss of an independent airline will place flights to these destinations in jeopardy. See Gov't Resp., Appendix, Att. 2 (Comments of Sen. John D. Rockefeller IV, Rep. Bill Shuster, Sen. John Thune, and Rep. Nick J. Rahall II); Id., Att. 3 (Comments of Sen. John Thune); Id., Att. 6. In addition, the Wayne County, Michigan Airport Authority (" WCAA" ), which operates the Detroit Metropolitan Airport (" DTW" ), expresses concern that the divestitures have forced American, as part of the merged airline, to cease its direct flights from Reagan National to DTW, leaving Delta as the only nonstop carrier on this route. Id., Att. 4 (Comments of WCAA); Id., Att. 5 (Suppl. Comments of WCAA). Yet, for the reasons discussed below, the Court is not persuaded that these objections are sufficient to place the settlement outside the reaches of the public interest.

The United States argues that the settlement protects small and medium sized communities without increasing oligopoly or imposing cumbersome route-specific remedies. The Court agrees. As an initial matter, the United States has provided evidence that LCCs do serve small and medium sized communities, providing a reasonable basis for its prediction that LCCs may expand into other small and medium sized communities in response to the divestitures. Gov't Resp. at 24, 41. The United States also argues that permitting

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divestiture purchases by Delta in order to preserve service to small and medium sized communities would do more harm than good, as further concentration of slots and gates with legacy carriers would exacerbate the alleged shift to oligopoly in the airline market. Id. at 40-41. Finally, the Court notes that the Final Judgment does not divest any of the merged airline's " commuter" slots at Reagan National. Id. at 36. These commuter slots, which are limited to smaller-sized aircraft, are well-suited for service to small and medium sized communities. Indeed, the Department of Transportation agreement entered into by Defendants, although not part of the Final Judgment, requires that Defendants use all of the commuter slots at Reagan National to serve airports designated as medium, small, and non-hub airports for a period of at least five years. Id. at 8 & n. 11.

In addition, the United States has adequately responded to the comments of the WCAA by noting that the proposed Final Judgment does not mandate American's elimination of the Reagan National-DTW nonstop flight. The merged airline maintains a significant share of slots at Reagan National and has the flexibility to deploy these slots in the way it sees fit. Id. at 35-36. By ceasing direct service to DTW, American is making a business decision as to which routes it will serve after the divestitures. Id. at 37. The United States further explains that amending the Final Judgment and mandating that the merged airline continue specific routes or requiring an LCC to undertake a specific route would represent a solution that is neither feasible nor desirable, as these " types of behavioral remedies would be exceedingly difficult to craft, entail a high degree of risk of unintended consequences, entangle the government and the Court in market operations, and raise practical problems such as the need for ongoing monitoring and enforcement." Id. at 30 n. 52. Indeed, " [e]ven a full-stop injunction of the merger would not have guaranteed continued competition between the merging airlines on specific routes . . . ." Id. Moreover, the Court notes that should prices increase on the Reagan National-DTW route as WCAA predicts, LCCs will have the incentive to enter this route and compete on price with Delta. As the United States points out, by providing LCCs with substantial assets at Reagan National, the settlement creates opportunities for this sort of competition. Id. at 39.

3. Failure to Comply with Tunney Act

Several commenters and amici contend that the settlement should be rejected because the United States and Defendants have failed to comply with the procedural requirements of the Tunney Act. The Court finds all of these objections unavailing.

First, both amici argue that Defendants closing of their merger on December 9, 2013, prior to this Court's entry of Final Judgment, was in contravention of the Tunney Act. AAI Amicus Brief at 19-21; Fjord Amicus Brief at 16-20. However, as the United States points out, the text of the Tunney Act does not require a district court's approval of a settlement prior to closing a merger. Gov't Resp. at 50-51. Indeed, courts have previously acknowledged and accepted such action. See SBC Commc'ns, 489 F.Supp.2d 1, 8 (D.D.C. 2007) (noting that the transaction at issue closed prior to entry of the Final Judgment " in keeping with [the United States'] standard practice that neither stipulations nor pending proposed final judgments prohibit the closing of the mergers." ). As the United States points out, by choosing to close their merger prior to entry of the Final Judgment, Defendants have accepted

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the risk of undoing the merger should it prove necessary. Gov't Resp. at 51. Moreover, the Court notes that although not charged with enforcing the Tunney Act, the Bankruptcy Court gave its approval to the settlement and thus allowed Defendants' merger to close well before this Court's consideration of the Final Judgment.

Second, one commenter argues that the United States has failed to meet its obligations to explain the proposed consent judgment under 15 U.S.C. § 16(b)(3), because the CIS does not include substantive economic analysis and cost-benefit analysis of the sort required by Executive Orders 13563 and 12866. Gov't Resp., Appendix, Att. 13 (Comments of Relpromax Antitrust, Inc.). Yet such analysis, while potentially helpful in establishing that a settlement is " within the reaches of the public interest" , Microsoft, 56 F.3d at 1461, is nowhere required by the Tunney Act. Moreover, in the Court's view, the United States' CIS contains a sufficient explanation of the settlement to allow the public to understand the provisions of the decree and submit meaningful comments. Accordingly, the alleged failure to comply with 15 U.S.C. § 16(b)(3) is without merit.

Similarly, the Court rejects this same commenter's argument that the United States was required to consider more than one alternative to settlement because the Tunney Act requires the United States' CIS to describe " alternatives to such proposal actually considered." 15 U.S.C. § 16(b)(6). Here, the United States has presented the only alternative to this settlement that it actually considered, and thus there is no violation of the Tunney Act simply because the United States did not consider other alternatives.

Finally, the Fjord amici and several commenters argue that the settlement was the product of improper political pressure by the airlines and should thus be rejected. Gov't Resp. at 49-50; Fjord Amicus Brief at 20-23. Yet the objecting parties provide no evidence for this contention other than bare speculation. They similarly provide no reason to doubt the sufficiency of Defendants' compliance with the disclosure requirements of the Tunney Act. 15 U.S.C. § 16(g). Accordingly, the Court will not reject the settlement on these grounds.

4. Ambiguity in Final Judgment

Next, commenter Allegiant Air, LLC argues that the Final Judgment is ambiguous regarding Defendants' ability to reacquire divested assets at LAX. Gov't Resp., Appendix, Att. 14 (Comments of Allegiant Air, LLC) at 2. Allegiant expresses concern that even after American, as part of the merged airline, relinquishes claims to " preferential use" of the divested gates at LAX, as required by the settlement, it may still attempt to operate out of these gates on a " common use" basis, and thus limit LCC access to LAX. Id. Airport gates leased to a particular carrier on a " preferential use" basis allow the leasing carrier to use the gate subject to the airport authority's ability to provide access to another airline if the gate is not being used by the lessor. Id. " Common use" gates involve a situation where multiple carriers share use of the gate, with priority among the users determined according to protocols set by the Los Angeles World Airports Authority, the owner and operator of LAX. Id. Allegiant is apparently concerned that the merged airline may regain rights to the LAX gates if they are designated as " common use." However, the United States argues, and the Court agrees, that the existing language in the Final Judgment prohibiting Defendants from reacquiring " any interest" in the divested assets is sufficient to prevent the merged airline from using LAX procedures to

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block LCC access at this airport. Gov't Resp. 46-47. Accordingly, modification of the Final Judgment is unnecessary.

5. Objections Outside the Scope of Tunney Act Review

In addition to the foregoing objections, several commenters and amici raise objections that fall outside the scope of review applicable under the Tunney Act.

First, Delta argues that the Complaint was unjustified and unnecessary because there is no threat of coordinated pricing among the remaining legacy airlines. Gov't Resp., Appendix, Att. 6 at 9-20. The Court takes no position on this objection other than to note that it does not come within the purview of Tunney Act review. Essentially, Delta is challenging the United States' prosecutorial discretion in bringing its initial lawsuit against Defendants and the merits of this underlying lawsuit. Such an objection sheds no light on whether the settlement of this litigation is within the reaches of the public interest. A Tunney Act proceeding is not occasion for a " de novo determination of facts and issues." United States v. Western Elec. Co., 993 F.2d 1572, 1577, 301 U.S.App.D.C. 268 (D.C. Cir. 1993) (citation omitted). Rather it merely represents an opportunity " to determine whether the Department of Justice's explanations [are] reasonable under the circumstances." Id. (citation omitted).

Next, the comments of the Consumer Travel Alliance, while recognizing that the settlement contains " some good first steps" , argues that the Department of Transportation should take further action to ensure competition in the airline industry, such as disclosure of airfares, ancillary fees and code shares. Gov't Resp., Appendix, Att. 8 (Comments of Consumer Travel Alliance). Again, the Court takes no position as to the validity of these objections, except to note that they fall outside the scope of the United States' Complaint. As discussed, under the Tunney Act, " the court is only authorized to review the decree itself" and not to " effectively redraft the complaint" and inquire into matters that the United States did not pursue. Microsoft, 56 F.3d at 1459. The Court " cannot look beyond the complaint in making the public interest determination unless the complaint is drafted so narrowly as to make a mockery of judicial power." SBC Commc'ns, 489 F.Supp.2d at 15. Here, there is no argument that the United States' Complaint is too narrowly drafted in excluding the Consumer Travel Alliance's concerns such that it has become a mockery of judicial power.

Finally, amici argue that the underlying merger between Defendants violates various principles of antitrust law. AAI Amicus Brief at 17-19 (alleging violation of the out-of-market benefits rule); Fjord Amicus Brief at 12-16 (alleging violation of Brown Shoe Co. v. United States, 370 U.S. 294, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962)). Yet these objections misconceive Tunney Act review, as this Court is " not tasked with deciding whether . . . mergers as a whole run afoul of the antitrust laws," SBC Commc'ns, 489 F.Supp.2d at 3, but rather must only ensure that the proposed settlement is " within the reaches of the public interest," Microsoft, 56 F.3d at 1461. Here, for the reasons discussed, the Court is satisfied that this standard is met.

IV. CONCLUSION

For the foregoing reasons, the Court concludes that the proposed Final Judgment is in the public interest. In an exercise of its discretion under the Tunney Act, the Court finds that a hearing on this issue is not necessary. The United States' [161] Motion for Entry of the Proposed Final Judgment is GRANTED, and the Final Judgment will be entered as proposed. A

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separate Order accompanies this Memorandum Opinion.

FINAL JUDGMENT

WHEREAS, Plaintiffs United States of America (" United States" ) and the States of Arizona, Florida, Tennessee and Michigan, the Commonwealths of Pennsylvania and Virginia, and the District of Columbia (" Plaintiff States" ) filed their Complaint against Defendants U.S. Airways Group, Inc. (" U.S. Airways" ) and AMR Corporation (" American" ) on August 13, 2013, as amended on September 5, 2013;

AND WHEREAS, the United States and the Plaintiff States and Defendants, by their respective attorneys, have consented to the entry of this Final Judgment without trial or adjudication of any issue of fact or law, and without this Final Judgment constituting any evidence against or admission by any party regarding any issue of fact or law;

AND WHEREAS, Defendants agree to be bound by the provisions of the Final Judgment pending its approval by the Court;

AND WHEREAS, the essence of this Final Judgment is the prompt and certain divestiture of certain rights or assets by the Defendants to assure that competition is not substantially lessened;

AND WHEREAS, the Final Judgment requires Defendants to make certain divestitures for the purposes of remedying the loss of competition alleged in the Complaint;

AND WHEREAS, Defendants have represented to the United States and the Plaintiff States that the divestitures required below can and will be made, and that the Defendants will later raise no claim of hardship or difficulty as grounds for asking the Court to modify any of the provisions below;

NOW THEREFORE, before any testimony is taken, without trial or adjudication of any issue of fact or law, and upon consent of the parties, it is ORDERED, ADJUDGED, AND DECREED:

I. JURISDICTION

This Court has jurisdiction over the subject matter of and each of the parties to this action. The Complaint states a claim upon which relief can be granted against Defendants U.S. Airways and American under Section 7 of the Clayton Act as amended (15 U.S.C. § 18).

II. DEFINITIONS

As used in the Final Judgment:

A. " Acquirer" or " Acquirers" means the entity or entities, approved by the United States in its sole discretion in consultation with the Plaintiff States, to which Defendants may divest all or specified parts of the Divestiture Assets.

B. " American" means Defendant AMR Corporation, its parents, successors and assigns, divisions, subsidiaries, affiliates, partnerships and joint ventures; and all directors, officers, employees, agents, and representatives of the foregoing. As used in this definition, the terms " parent," " subsidiary," " affiliate," and " joint venture" refer to any person or entity in which American holds, directly or indirectly, a majority (greater than 50 percent) or total ownership or control or which holds, directly or indirectly a majority (greater than 50 percent) or total ownership or control in American.

C. " Associated Ground Facilities" means the facilities owned or operated by Defendants and reasonably necessary for Acquirer(s) to operate the Divested Assets at the relevant airport, including, but not limited to, ticket counters, hold-rooms, leased jet bridges, and operations space.

D. " DCA Gates and Facilities" means all rights and interests held by Defendants in the gates at Washington Reagan National Airport (" DCA" ) described in Exhibit A and in the Associated Ground Facilities, up to the extent such gates and Associated Ground Facilities were used by Defendants to support the use of the DCA Slots.

E. " DCA Slots" means all rights and interests held by Defendants in the 104 slots at DCA listed in Exhibit A, consisting of two air carrier slots held by U.S. Airways at DCA and 102 air carrier slots held by American at DCA, including the JetBlue Slots.

F. " Divestiture Assets" means (1) the DCA Slots, (2) the DCA Gates and Facilities, (3) the LGA Slots, (4) the LGA Gates and Facilities, and (5) the Key Airport Gates and Facilities.

G. " JetBlue Slots" means all rights and interests held by Defendants in the 16 slots at DCA currently leased by American to JetBlue Airways, Inc., listed in Exhibit A.

H. " Key Airport" means each of the following airports: (1) Boston Logan International Airport; (2) Chicago O'Hare International Airport; (3) Dallas Love Field; (4) Los Angeles International Airport; and (5) Miami International Airport.

I. " Key Airport Gates and Facilities" means all rights and interests held by Defendants in two gates at each Key Airport as described in Exhibit C. The term " Key Airport Gates and Facilities" includes Associated Ground Facilities, up to the extent such facilities were used by Defendants to support the gates described in Exhibit C.

J. " LGA Gates and Facilities" means all rights and interests held by Defendants in the gates at New York LaGuardia Airport (" LGA" ) described in Exhibit B and Associated Ground Facilities up to the extent of such gates and Associated Ground Facilities were used by Defendants to support the use of the LGA Slots.

K. " LGA Slots" means the 34 slots at New York LaGuardia Airport (" LGA" ) listed in Exhibit B, consisting of the Southwest Slots and 24 additional slots held by American or U.S. Airways.

L. " Slot Bundles" means groupings of DCA Slots and LGA Slots, as determined by the United States in its sole discretion in consultation with the Plaintiff States.

M. " Southwest Slots" means the 10 slots at LGA currently leased by American to Southwest Airlines, Inc. listed in Exhibit B.

N. " Transaction" means the transaction referred to in the Agreement and Plan of Merger among AMR Corporation, AMR Merger Sub, Inc., and U.S. Airways Group, Inc., dated as of February 13, 2013.

O. " U.S. Airways" means Defendant U.S. Airways Group, Inc., its parents, successors and assigns, divisions, subsidiaries, affiliates, partnerships and joint ventures; and all directors, officers, employees, agents, and representatives of the foregoing. For purposes of this definition, the terms " parent," " subsidiary," " affiliate," and " joint venture" refer to any person or entity in which U.S. Airways holds, directly or indirectly, a majority (greater than 50 percent) or total ownership or control or which holds, directly or indirectly, a majority (greater than 50 percent) or total ownership or control in U.S. Airways.

III. APPLICABILITY

A. This Final Judgment applies to Defendants and all other persons in active concert or participation with any of them who receive actual notice of this Final Judgment by personal service or otherwise.

B. If, prior to complying with Section IV and V of this Final Judgment, a Defendant directly or indirectly sells or otherwise disposes of any of the Divestiture Assets, it shall require the purchaser of the Divestiture Assets to be bound by the provisions of this Final Judgment. Defendants need not obtain such an agreement from the Acquirer(s) of the assets divested pursuant to this Final Judgment.

IV. DIVESTITURES

A. Subject to any necessary approval of the Federal Aviation Administration, Defendants are ordered and directed to divest the DCA Slots and LGA Slots to Acquirers in a manner consistent with this Final Judgment within ninety (90) calendar days after the later of (1) completion of the Transaction or (2) the United States providing Defendants a list of the Acquirers and Slot Bundles.

B. Subject to any necessary approval of the relevant airport operator, Defendants are ordered and directed to transfer the DCA Gates and Facilities as necessary to Acquirers of the DCA Slots within ninety (90) days after completion of the divestiture of the DCA Slots.

C. Subject to any necessary approval of the relevant airport operator, Defendants are ordered and directed to transfer the LGA Gates and Facilities as necessary to Acquirer(s) of the LGA Slots within ninety (90) days after completion of the divestiture of the LGA Slots.

D. Subject to any necessary approval of the relevant airport operator, Defendants are ordered and directed to divest the Key Airport Gates and Facilities to Acquirer(s) in a manner consistent with this Final Judgment within 180 calendar days after the later of (1) completion of the Transaction or (2) the United States providing Defendants a list of the Acquirers.

E. All proceeds from the transfer of the DCA Slots and the LGA Slots are for the account of Defendants. Defendants agree to use their best efforts to divest the Divestiture Assets as expeditiously as possible. The United States in its sole discretion, may agree to one or more extensions of each of the time periods specified in Sections IV.A. -- IV.D., not to exceed sixty (60) calendar days in total for each such time period, and shall extend any time period by the number of days during which there is pending any objection under Section VI of this Final Judgment. The United States shall notify the Court of any extensions of the time periods.

F. The Court orders the divestiture of the DCA Slots and DCA Gates and Facilities to proceed as follows:

1. Defendants shall offer to divest the 16 JetBlue Slots to JetBlue Airways, Inc., by making permanent the current agreement between JetBlue and American to exchange the JetBlue Slots for slots at John F. Kennedy International Airport;
2. Defendants shall divest in Slot Bundles to at least two Acquirers the other 88 DCA slots listed in Exhibit A, together with any of the JetBlue Slots not sold to JetBlue pursuant to paragraph IV.F.1. above;
3. Defendants shall either (a) sublease to Acquirers of the DCA Slots, the DCA Gates and Facilities on the same terms and conditions pursuant to which the Defendants currently lease the DCA Gates and Facilities or, (b) with the consent of the United States, pursuant to an agreement with the airport operator, relinquish the DCA Gates and Facilities to the airport operator to enable the Acquirer to lease them from the airport operator on terms and conditions determined by the airport operator, and shall make best efforts to obtain any consent or approval from the relevant airport operator for the divestitures required by this paragraph;
4. Following the divestiture of the DCA Slots, if requested by an Acquirer, Defendants shall lease the DCA Slots from the Acquirer for no consideration for a period not to exceed 180 calendar days. Defendants shall continue to operate the DCA Slots during this lease-back period at a level sufficient to prevent the DCA Slots from reverting to the Federal Aviation Administration pursuant to 14 C.F.R. § 93.227. The lease-back period may be extended at the sole discretion of the Acquirer(s), with the approval of the United States, in consultation with the Plaintiff States.

G. The Court orders the divestiture of the LGA Slots and LGA Gates and Facilities to proceed as follows:

1. Defendants shall offer to divest the ten Southwest Slots to Southwest Airlines, Inc.;
2. Defendants shall divest in Slot Bundles to Acquirer(s) the other 24 LGA slots listed in Exhibit B, together with any of the Southwest Slots not sold to Southwest pursuant to Paragraph IV.G.1. above;
3. Defendants shall either (a) sublease to the Acquirer(s) of the LGA Slots, the LGA Gates and Facilities on the same terms and conditions pursuant to which the Defendants currently lease the LGA Gates and Facilities or, (b) with the consent of the United States, pursuant to an agreement with the airport operator, relinquish the LGA Gates and Facilities to the airport operator to enable the Acquirer to lease them from the airport operator on terms and conditions determined by the airport operator, and shall make best efforts to obtain any consent or approval from the relevant airport operator for the divestitures required by this paragraph;
4. Defendants shall make reasonable best efforts to facilitate any relocations necessary to ensure that the Acquirer(s) can operate from contiguous gates at LGA to the extent such relocation does not unduly disrupt Defendants' operations.
5. Following the divestiture of the LGA Slots, if requested by the Acquirer(s), Defendants shall lease the LGA Slots from the Acquirer for no consideration for a period not to exceed 180 calendar days. Defendants shall continue to operate the LGA Slots during this lease-back period at a level sufficient to prevent the LGA Slots from reverting to the Federal Aviation Administration pursuant to 71 Fed. Reg. 77,854 (Dec. 27, 2006), as extended by 78 Fed. Reg. 28, 279 (Oct. 24, 2013). The lease-back period may be extended at the sole discretion of the Acquirer(s), with the approval of the United States, in consultation with the Plaintiff States.

H. The Court orders the divestiture of the Key Airport Gates and Facilities, to proceed as follows:

1. Defendants shall either (a) lease to the Acquirers the Key Airport Gates and Facilities on the same terms and conditions pursuant to which the Defendants currently lease the Key Airport Gates and Facilities, or (b) with the consent of the United States, pursuant to an agreement with the airport operator, relinquish the Key Airport Gates and Facilities to the airport operator to enable the Acquirer to lease them from the airport operator on terms and conditions determined by the airport operator;
2. Defendants shall make best efforts to obtain any consent or approval from the relevant airport operator for the transfer(s) required by this Section;
3. With respect to the Divestiture Assets at Boston Logan International Airport, Defendants shall make reasonable best efforts to facilitate any re-locations necessary to ensure that the Acquirer(s) can operate from contiguous gates at the Key Airport, to the extent such relocation does not unduly disrupt Defendants' operations.

I. In accomplishing the divestiture ordered by this Final Judgment, Defendants promptly shall make known, by usual and customary means, the availability of the Divestiture Assets to Acquirer(s). Defendants shall inform any such person contacted regarding a possible purchase of the Divestiture Assets that they are being divested pursuant to this Final Judgment and provide that person with a copy of this Final Judgment. Defendants shall offer to furnish to all prospective Acquirers, subject to customary confidentiality assurances, all information and documents relating to the Divestiture Assets customarily provided in a due diligence process except such information or documents subject to the attorney-client privileges or work-product doctrine. Defendants shall make available such information to the United States at the same time that such information is made available to any other person.

J. As part of their obligations under paragraph IV.I. above, Defendants shall permit prospective Acquirers of the Divestiture Assets to have reasonable access to: (i) personnel; (ii) the physical facilities of the Divestiture Assets to make reasonable inspections; (iii) all environmental, zoning, and other permit documents and information; and (iv) all financial, operational, or other documents and information customarily provided as part of a due diligence process.

K. Defendants shall warrant to the Acquirer(s) that each asset will be operational on the date of transfer.

L. Defendants shall not take any action that will impede in any way the permitting, operation, or divestiture of the Divestiture Assets.

M. Defendants shall warrant to the Acquirer(s) that there are no material defects in any environmental, zoning or other permits obtained or controlled by Defendants pertaining to the operation of the Divestiture Assets, and that following the sale of the Divestiture Assets, Defendants will not undertake, directly or indirectly, any challenges to the environmental, zoning, or other permits relating to the operation of the Divestiture Assets.

N. Unless the United States otherwise consents in writing, the divestiture pursuant to Section IV or V shall include the entire Divestiture Assets, and shall be accomplished in such a way as to satisfy the United States, in its sole discretion, in consultation with the Plaintiff States, that the Divestiture Assets can and will be used by the Acquirer(s) as part of a viable, ongoing business, engaged in providing scheduled air passenger service in the United States. Divestiture of the Divestiture Assets may be made to Acquirers, provided that in each instance it is demonstrated to the sole satisfaction of the United States, in consultation with the Plaintiff States, that the Divestiture Assets will remain viable and the divestiture of such assets will remedy the competitive harm alleged in the Complaint. The divestiture, whether pursuant to Section IV or Section V of this Final Judgment, shall be:

1. made to an Acquirer(s) that, in the United States' sole judgment, in consultation with the Plaintiff States, has the intent and capability (including the necessary managerial, operational, technical and financial capability) to compete effectively in the business of providing scheduled airline passenger service; and
2. accomplished so as to satisfy the United States in its sole discretion, in consultation with the Plaintiff States, that none of the terms of any agreement between an Acquirer(s) and Defendants gives Defendants the ability unreasonably to raise the Acquirer's costs, to lower the Acquirer's efficiency, or otherwise to interfere in the ability of the Acquirer(s) to effectively compete.

V. APPOINTMENT OF TRUSTEE TO EFFECT DIVESTITURE

A. If Defendants have not divested the Divestiture Assets within the time periods specified in Sections IV.A. -- IV.D., Defendants shall notify the United States and the Plaintiff States of that fact in writing. Upon application of the United States, the Court shall appoint a Divestiture Trustee selected by the United States, in consultation with the Plaintiff States, and approved by the Court to divest the Divestiture Assets in a manner consistent with this Final Judgment.

B. After the appointment of a Divestiture Trustee becomes effective, only the Divestiture Trustee shall have the right to sell the Divestiture Assets, including any arrangements related to Associated Ground Facilities. The Divestiture Trustee shall have the power and authority to accomplish the divestiture to an Acquirer(s) acceptable to the United States in its sole discretion, in consultation with the Plaintiff States, at such price and on such terms as are then obtainable upon reasonable effort by the Divestiture Trustee, subject to the provisions of Section IV, V, and VI of this Final Judgment, and shall have such other powers as this Court deems appropriate.

C. Subject to Section V.E. of this Final Judgment, the Divestiture Trustee may hire at the reasonable cost and expense of Defendants any investment bankers, attorneys, or other agents, who shall be solely accountable to the Divestiture Trustee, reasonably necessary in the Divestiture Trustee's judgment to assist in the divestiture.

D. Defendants shall not object to a sale by the Divestiture Trustee on any ground other than the Divestiture Trustee's malfeasance. Any such objections by Defendants must be conveyed in writing to the United States, the Plaintiff States and the Divestiture Trustee within ten (10) calendar days after the Divestiture Trustee has provided the notice required under Section VI.A.

E. The Divestiture Trustee shall serve at the cost and expense of Defendants, pursuant to a written agreement with Defendants on such terms and conditions as the United States approves, in consultation with the Plaintiff States, and shall account for all monies derived from the sale of the assets sold by the Divestiture Trustee and all costs and expenses so incurred. After approval by the Court of the Divestiture Trustee's accounting, including fees for its services and those of any professionals and agents retained by the Divestiture Trustee, all remaining money shall be paid to Defendants and the trust shall then be terminated. The compensation of the Divestiture Trustee and any professionals and agents retained by the Divestiture Trustee shall be reasonable in light of the value of the Divestiture Assets and based on a fee arrangement providing the Divestiture Trustee with an incentive based on the price and terms of the divestiture and the speed with which it is accomplished, but timeliness is paramount.

F. Defendants shall use their best efforts to assist the Divestiture Trustee in accomplishing the required divestiture. The Divestiture Trustee and any consultants, accountants, attorneys, and other persons retained by the Divestiture Trustee shall have full and complete access to the personnel, books, records, and facilities of the business to be divested, and Defendants shall develop financial and other information relevant to such business as the Divestiture Trustee may reasonably request, subject to reasonable protection for trade secret or other confidential research, development, or commercial information. Defendants shall take no action to interfere with or to impede the Divestiture Trustee's accomplishment of the divestiture.

G. After its appointment, the Divestiture Trustee shall file monthly reports with the United States, the Plaintiff States, and the Court setting forth the Divestiture Trustee's efforts to accomplish the divestiture ordered under this Final Judgment. To the extent such reports contain information that the Divestiture Trustee or Defendants deem confidential, such reports shall not be filed in the public docket of the Court. Such reports shall include the name, address, and telephone number of each person who, during the preceding month, made an offer to acquire, expressed an interest in acquiring, entered into negotiations to acquire, or was contacted or made an inquiry about acquiring any interest in the Divestiture Assets, and shall describe in detail each contact with any such person. The Divestiture Trustee shall maintain full records of all efforts made to divest the Divestiture Assets.

H. If the Divestiture Trustee has not accomplished the divestiture ordered under this Final Judgment within six (6) months after its appointment, the Divestiture Trustee shall promptly file with the Court a report setting forth (1) the Divestiture Trustee's efforts to accomplish the required divestiture, (2) the reasons, in the Divestiture Trustee's judgment, why the required divestiture has not been accomplished, and (3) the Divestiture Trustee's recommendations. To the extent such reports contain information that the Divestiture Trustee deems confidential, such reports shall not be filed in the public docket of the Court. The Divestiture Trustee shall at the same time furnish such report to the Defendants and to the United States, which shall have the right to make additional recommendations consistent with the purpose of the trust. The Court thereafter shall enter such orders as it shall deem appropriate to carry out the purpose of the Final Judgment, which may, if necessary, include extending the trust and the term of the Divestiture Trustee's appointment by a period requested by the United States.

VI. NOTICE OF PROPOSED DIVESTITURES

A. Within two (2) business days following execution of a definitive divestiture agreement, Defendants or the Divestiture Trustee, whichever is then responsible for effecting the divestitures required herein, shall notify the United States and the Plaintiff States, of any proposed divestitures required by Section IV or V of this Final Judgment. If the trustee is responsible, it shall similarly notify Defendants. The notice shall set forth the details of the proposed divestitures and list the name, address, and telephone number of each person not previously identified who offered or expressed an interest in or desire to acquire any ownership interest in the Divestiture Assets, together with full details of the same.

B. Within fifteen (15) calendar days of receipt by the United States of such notice, the United States, in its sole discretion, in consultation with the Plaintiff States, may request from Defendants, the proposed Acquirer(s), any other third party, or the Divestiture Trustee, if applicable, additional information concerning the proposed divestitures, the proposed Acquirer(s), and any other potential Acquirer(s). Defendants and the Divestiture Trustee shall furnish any additional information requested to the United States within fifteen (15) calendar days of receipt of the request, unless the parties otherwise agree.

C. Within thirty (30) calendar days after receipt of the notice, or within twenty (20) calendar days after the United States has been provided the additional information requested from Defendants, the proposed Acquirer(s), any third party, and the trustee, whichever is later, the United States, in consultation with the Plaintiff States, shall provide written notice to Defendants and/or the Divestiture Trustee, stating whether it objects to the proposed divestitures. If the United States provides written notice that it does not object, the divestitures may be consummated, subject only to the Defendants' limited right to object to the sale under Section V.D. of this Final Judgment. Absent written notice that the United States does not object to the proposed Acquirer(s) or upon objection by the United States, a divestiture proposed under Section IV or Section V shall not be consummated. Upon objection by Defendants under Section V.D., a divestiture proposed under Section V shall not be consummated unless approved by the Court.

VII. MONITORING TRUSTEE

A. Upon the filing of this Final Judgment, the United States may, in its sole discretion, in consultation with the Plaintiff States, appoint a Monitoring Trustee, subject to approval by the Court.

B. The Monitoring Trustee shall have the power and authority to monitor Defendants' compliance with the terms of this Final Judgment, and shall have such powers as this Court deems appropriate. The Monitoring Trustee shall be required to investigate and report on the Defendants' compliance with this Final Judgment and the Defendants' progress toward effectuating the purposes of this Final Judgment.

C. Subject to Section VII.E of this Final Judgment, the Monitoring Trustee may hire at the cost and expense of Defendants, any consultants, accountants, attorneys, or other persons, who shall be solely accountable to the Monitoring Trustee, reasonably necessary in the Monitoring Trustee's judgment.

D. Defendants shall not object to actions taken by the Monitoring Trustee in fulfillment of the Monitoring Trustee's responsibilities under this Final Judgment or any other Order of this Court on any ground other than the Monitoring Trustee's malfeasance. Any such objections by Defendants must be conveyed in writing to the United States, the Plaintiff States, and the Monitoring Trustee within ten (10) calendar days after the action taken by the Monitoring Trustee giving rise to the Defendants' objection.

E. The Monitoring Trustee shall serve at the cost and expense of Defendants, pursuant to a written agreement with Defendants on such terms and conditions as the United States, in consultation with the Plaintiff States, approves. The compensation of the Monitoring Trustee and any consultants, accountants, attorneys, and other persons retained by the Monitoring Trustee shall be on reasonable and customary terms commensurate with the individuals' experience and responsibilities. The Monitoring Trustee shall, within three (3) business days of hiring any consultants, accountants, attorneys, or other persons, provide written notice of such hiring and the rate of compensation to Defendants.

F. The Monitoring Trustee shall have no responsibility or obligation for the operation of Defendants' businesses.

G. Defendants shall use their best efforts to assist the Monitoring Trustee in monitoring Defendants' compliance with their individual obligations under this Final Judgment. The Monitoring Trustee and any consultants, accountants, attorneys, and other persons retained by the Monitoring Trustee shall have full and complete access to the personnel, books, records, and facilities relating to compliance with this Final Judgment, subject to reasonable protection for trade secret or confidential research, development, or commercial information or any applicable privileges. Defendants shall take no action to interfere with or to impede the Monitoring Trustee's accomplishment of its other responsibilities. The Monitoring Trustee shall, within three (3) business days of hiring any consultants, accountants, attorneys, or other persons, provide written notice of such hiring and the rate of compensation to Defendants.

H. After its appointment, the Monitoring Trustee shall file reports every ninety (90) days, or more frequently as needed, with the United States, the Plaintiff States, the Defendants and the Court setting forth the Defendants' efforts to comply with their individual obligations under this Final Judgment. To the extent such reports contain information that the trustee deems confidential, such reports shall not be filed in the public docket of the Court.

I. The Monitoring Trustee shall serve until the completion of the divestitures required by Sections IV and V of this Final Judgment, including any lease back period pursuant to Section IV.F.5. or IV.G.5.

VIII. FINANCING

Defendants shall not finance all or any part of any purchase made pursuant to Section IV or V of this Final Judgment. For purposes of this Section VIII, subleasing shall not be regarded as financing.

IX. ASSET PRESERVATION

Until the divestiture required by this Final Judgment has been accomplished, Defendants shall take all steps necessary to comply with the Asset Preservation Stipulation and Order entered by this Court. Defendants shall take no action that would jeopardize the divestiture ordered by this Court.

X. AFFIDAVITS

A. Within twenty (20) calendar days of entry of the Court entering the Asset Preservation Order and Stipulation in this matter, and every thirty (30) calendar days thereafter until the divestiture has been completed under Section IV or V, Defendants shall deliver to the United States and the Plaintiff States an affidavit as to the fact and manner of its compliance with Section IV or V of this Final Judgment. Each such affidavit shall include the name, address, and telephone number of each person who, during the that first twenty (20) calendar days or, thereafter, the preceding thirty (30) calendar days, made an offer to acquire, expressed an interest in acquiring, entered into negotiations to acquire, or was contacted or made an inquiry about acquiring, any interest in the Divestiture Assets, and shall describe in detail each contact with any such person during that period. Each such affidavit shall also include a description of the efforts defendants have taken to solicit buyers for the Divestiture Assets, and to provide required information to prospective Acquirers, including the limitations, if any, on such information. Assuming the information set forth in the affidavit is true and complete, any objection by the United States to information provided by Defendants, including limitation on information, shall be made within fourteen (14) calendar days of receipt of such affidavit.

B. Within twenty (20) calendar days of the Court entering the Asset Preservation Order and Stipulation in this matter, Defendants shall deliver to the United States an affidavit that describes in reasonable detail all actions defendants have taken and all steps Defendants have implemented on an ongoing basis to comply with Section IX of this Final Judgment. Defendants shall deliver to the United States an affidavit describing any changes to the efforts and actions outlined in Defendants' earlier affidavits filed pursuant to this section within fifteen (15) calendar days after the change is implemented.

C. Defendants shall keep all records of all efforts made to preserve and divest the Divestiture Assets until one year after such divestiture has been completed.

XI. COMPLIANCE INSPECTION

A. For the purposes of determining or securing compliance with this Final Judgment, or of any related orders such as any Asset Preservation Order, or of determining whether the Final Judgment should be modified or vacated, and subject to any legally recognized privilege, from time to time authorized representatives of the United States Department of Justice, including consultants and other persons retained by the United States, shall, upon written request of an authorized representative of the Assistant Attorney General in charge of the Antitrust Division, and on reasonable notice to Defendants, be permitted:

(1) access during Defendants' office hours to inspect and copy, or at the option of the United States, to require Defendants to provide hard copy or electronic copies of, all books, ledgers, accounts, records, data, and documents in the possession, custody, or control of Defendants, relating to any matters contained in this Final Judgment; and

(2) to interview, either informally or on the record, Defendants' officers, employees, or agents, who may have their individual counsel present, regarding such matters. The interviews shall be subject to the reasonable convenience of the interviewee and without restraint or interference by Defendants.

B. Upon the written request of an authorized representative of the Assistant Attorney General in charge of the Antitrust Division, Defendants shall submit written reports or response to written interrogatories, under oath if requested, relating to any of the matters contained in this Final Judgment as may be requested.

C. No information or documents obtained by the means provided in this section shall be divulged by the United States to any person other than an authorized representative of the executive branch of the United States, except in the course of legal proceedings to which the United States is a party (including grand jury proceedings), or for the purpose of securing compliance with this Final Judgment, or as otherwise required by law.

D. If at the time information or documents are furnished by Defendants to the United States, Defendants represent and identify in writing the material in any such information or documents to which a claim of protection may be asserted under Rule 26(c)(7) of the Federal Rules of Civil Procedure, and Defendants mark each pertinent page of such material, " Subject to claim of protection under Rule 26(c)(7) of the Federal Rules of Civil Procedure," then the United States shall give Defendants ten (10) calendar days notice prior to divulging such material in any legal proceeding (other than a grand jury proceeding).

XII. NO REACQUISITION

Defendants shall not reacquire any interest in any part of the Divestiture Assets divested under this Final Judgment during the term of this Final Judgment. Nothing in this Final Judgment shall prevent Defendants from engaging in trades, exchanges, or swaps involving Divestiture Assets with an Acquirer, provided such arrangements do not increase Defendants' percentage of slots operated or held or gates operated or held at the airport in question, except that, consistent with industry practice, Defendants may temporarily operate slots for periods of no more than two consecutive months at the request of the Acquirer. Nothing in this Section XII shall prevent Defendants from acquiring additional slots, gates or facilities, other than the Divestiture Assets, at DCA, LGA or the Key Airports subject to the notification requirement in Section XIII.A. Nothing in this Section shall prevent Defendants from cooperating in gate or facility relocations in the ordinary course of the airport operator's business, including re-locating to the Divestiture Assets, provided the Acquirer of those gates is offered alternative gates and Associated Ground Facilities from the airport operator.

XIII. NOTIFICATION OF FUTURE TRANSACTIONS

A. Unless such transaction is otherwise subject to the reporting and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, 15 U.S.C. § 18a (the " HSR Act" ), Defendants shall not acquire any interest in any slot at DCA that was in use at the completion of the Transaction without providing notice to the United States at least thirty (30) calendar days prior to the acquisition, provided however that this reporting requirement shall not apply to transactions that do not result in an increase in Defendants' percentage of slots operated or held at DCA. Defendants shall maintain a record of any non-reportable transactions and shall provide such record to the United States promptly upon request.

B. Any notification provided pursuant to Section XIII.A. above shall be provided in the same format as required by the HSR Act, and shall include the names of the principal representatives of the parties to the transaction who negotiated the agreement and any management or strategic plans discussing the proposed transaction. If within the 30-day period after notification the United States makes a written request for additional information regarding the transaction, Defendants shall not consummate the proposed transaction or agreement until thirty (30) calendar days after submitting all such additional information. Early termination of the waiting periods in this paragraph may be requested and, where appropriate, granted in a similar manner as applicable under the requirements and provisions of the HSR Act and rules promulgated thereunder.

C. All references to the HSR Act in this Final Judgment refer to the HSR Act as it exists at the time of the transaction or agreement and incorporate any subsequent amendments to the HSR Act.

XIV. BANKRUPTCY

For purposes of Section 365 of the Bankruptcy Reform Act of 1978, as amended, and codified as 11 U.S.C. § § 101 et. seq. (the " Bankruptcy Code" ) or any analogous provision under any law of any foreign or domestic, federal, state, provincial, local, municipal or other governmental jurisdiction relating to bankruptcy, insolvency or reorganization (" Foreign Bankruptcy Law" ), (a) no sublease or other agreement related to the Divesture Assets will be deemed to be an executory contract, and (b) if for any reason a sublease or other agreement related to the Divesture Assets is deemed to be an executory contract, the Defendants shall take all necessary steps to ensure that the Acquirer(s) shall be protected in the continued enjoyment of its right under any such agreement including, acceptance of such agreement or any underlying lease or other agreement in proceedings under the Bankruptcy Code or any analogous provision of Foreign Bankruptcy Law.

XV. RETENTION OF JURISDICTION

This Court retains jurisdiction to enable any party to this Final Judgment to apply to this Court at any time for further orders and directions as may be necessary or appropriate to carry out or construe this Final Judgment, to modify any of its provisions, to ensure and enforce compliance, and to punish violations of its provisions.

XVI. EXPIRATION OF FINAL JUDGMENT

Unless this Court grants an extension, this Final Judgment shall expire ten (10) years from the date of its entry.

XVII. PUBLIC INTEREST DETERMINATION

Entry of this Final Judgment is in the public interest. The parties have complied with the requirements of the Antitrust Procedures and Penalties Act, 15 U.S.C. § 16, including making copies available to the public of this Final Judgment, the Competitive Impact Statement, and any comments thereon and the United States' responses to comments. Based upon the record before the Court, which includes the Competitive Impact Statement and any comments and response to comments filed with the Court, entry of this Final Judgment is in the public interest. By separate Memorandum Opinion issued this day, the Court provides an explanation of why this Final Judgment is in the public interest.

EXHIBIT A

DCA SLOTS

JetBlue Slots (currently held by American)

1284

1040

1018

1012

1025

1200

1034

1334

1013

1058

1172

1221

1014

1217

1097

1174

Additional American Air Carrier Slots

1090

1144

1570

1321

1425

1445

1521

1585

1092

1159

1274

1296

1493

1496

1044

1051

1667

1233

1322

1341

1616

1138

1139

1271

1430

1464

1547

1272

1351

1481

1506

1525

1611

1381

1420

1480

1641

1662

1104

1342

1543

1666

1208

1286

1299

1345

1388

1422

1620

1117

1121

1167

1312

1460

1473

1624

1625

1628

1364

1411

1561

1646

1074

1100

1202

1446

1405

1499

1276

1292

1353

1396

1634

1441

1475

1492

1503

1559

1587

1623

1008

1606

1575

1642

1122

1216

US Airways Air Carrier Slots

1070

1066

DCA Gates

Up to five (5) gates from among Gates 24, 26, 28, 30 and 32, if necessary.

EXHIBIT B

LGA SLOTS

Southwest Slots (currently held by American)

3351

2101

3335

3422

3665

3314

2215

3045

2120

3312

American LGA Slots

3189

3068

2139

2147

3236

2222

2096

2075

3784

2033

3841

2008

3594

3671

3380

3258

3282

3080

2032

2230

3013

2166

2111

3826

LGA Gates

Up to two contiguous gates on Concourse C currently leased by American at LGA.

EXHIBIT C

KEY AIRPORT GATES

Boston Logan International Airport

Two gates that Defendants currently lease or two gates that Defendants would be entitled to occupy following any relocation of gates and facilities at the direction of Massport.

Chicago O'Hare International Airport

Gates L1 and L2. Defendants, at their own expense, will reconfigure Gate L2A, L2B, and L2C, as follows: Gate L2A will be restored to a mainline gate by (a) removing the gate at L2B, (b) moving the gate podium that currently serves Gate L2C south, creating one additional bay for gate L2A, and restriping the tarmac. Defendants will retain their interest in Gate L2C.

Dallas Love Field

Gates currently leased by American at Dallas Love Field, or which American will be entitled to occupy following completion of construction of the Love Field Modernization Program.

Los Angeles International Airport

Gates 31A and 3IB in Terminal 3.

Miami International Airport

Two gates currently leased by U.S. Airways in Terminal J.


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