60129958_3.docx -1- 

UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

Washington, D.C. 

ALASKA AIRLINES, INC., et al., 

 v. 

LOS ANGELES WORLD AIRPORTS, et al. 

Docket No. 

OST-2007-27331 

COMPLAINANTS’ AND RESPONDENTS’ JUNE 

15, 2011 JOINT REPORT ON THE STATUS OF 

SETTLEMENT DISCUSSIONS

M. Roy Goldberg 

SHEPPARD MULLIN 

 RICHTER & HAMPTON LLP 

1300 I Street, NW 

Suite 1100 East 

Washington, DC 20005-3314 

Phone: (202) 218-0007 

Fax: (202) 218-0020 

rgoldberg@sheppardmullin.com

Counsel for: 

Alaska Airlines, Inc. 

AirTran Airways, Inc. 

ATA Airlines, Inc. 

Frontier Airlines, Inc. 

Midwest Airlines, Inc. 

Southwest Airlines Co. 

US Airways Group, Inc. 

Steven S. Rosenthal 

Jeffery A. Tomasevich 

J.D. Taliaferro 

KAYE SCHOLER LLP

901 Fifteenth Street, NW 

Washington, DC 20005 

Phone (202) 682-3500 

Fax: (202) 682-3580 

email: srosenthal@kayescholer.com

 jtomasevich@kayescholer.com

 jtaliaferro@kayescholer.com

Carmen A. Trutanich 

Los Angeles City Attorney 

Raymond S. Ilgunas, Interim General Counsel, 

Los Angeles 

 World Airports 

LOS ANGELES CITY ATTORNEY’S OFFICE

Los Angeles World Airports 

One World Way 

Los Angeles, CA 90045 

Phone: (424) 646-5010 

Counsel for Respondents
COMPLAINANTS’ AND RESPONDENTS’ JUNE 15, 2011 JOINT 

REPORT ON THE STATUS OF SETTLEMENT DISCUSSIONS

60129958_3.DOCX -2- 

Robert W. Kneisley 

Associate General Counsel 

Leslie Abbott 

Attorney 

SOUTHWEST AIRLINES CO. 

1901 L Street, N.W. 

Suite 640 

Washington, DC 20036 

Howard Kass 

Vice President, Legal and Government 

Affairs 

US AIRWAYS GROUP, INC. 

1401 H Street, N.W. 

Suite 1075 

Washington, DC 20005 

Kyle Levine 

Senior Attorney 

ALASKA AIRLINES, INC. 

19300 International Blvd. 

Seattle, Washington 98188-5303 

Jacqueline Peter 

Counsel 

FRONTIER AIRLINES, INC. 

7001 Tower Road 

Denver, Colorado 80249 

Steve Rossum 

Executive Vice President & 

General Counsel 

AIRTRAN AIRWAYS, INC. 

9955 AirTran Boulevard 

Orlando, Florida 32827 

Edward P. Faberman 

WILEY REIN LLP 

1776 K Street, N.W. 

Washington, DC 20006 

Counsel for Air Tran Airways, Inc. 

DATED: June 15, 2011 
COMPLAINANTS’ AND RESPONDENTS’ JUNE 15, 2011 JOINT 

REPORT ON THE STATUS OF SETTLEMENT DISCUSSIONS

60129958_3.DOCX -1- 

The T1/T3 Airlines1 and Los Angeles World Airports2 (“LAWA”) (collectively, 

the “Parties”) hereby jointly file this status report, in response to the DOT’s “Third Order 

Granting an Interim Stay of Proceedings and Extending Deadline to File Procedural 

Comments,” Order 2010-10, January 14, 2011 (“Third Order”), regarding the efforts to 

settle the remanded issues set forth in DOT’s Order 2009-11-24 (“November 24 Notice”) 

and Order 2009-12-17 (“First Order”). 

BACKGROUND

On November 24, 2009, following remand of certain issues by the United States 

Court of Appeals for the District of Columbia Circuit (the “D.C. Circuit”), the DOT 

issued the November 24 Notice in this case. The November 24 Notice directed the T1/T3 

Airlines and LAWA “to advise the Department . . . whether there is a possibility of 

settlement on the issues remanded” by the D.C. Circuit. November 24 Notice, at 5. The 

November 24 Notice further directed another submission on procedural issues at a later 

date. Id. 

Following LAWA’s and the T1/T3 Airlines’ initial submissions on December 2, 

2009 and December 4, 2009, respectively, the Parties held a conference call with DOT on 

December 16, 2009. During that call, the Parties discussed additional procedural issues, 

and DOT subsequently issued the First Order, directing the Parties to file, no later than 

 

1

The T1/T3 Airlines are the seven air carriers that on February 16, 2007, filed with the 

Office of the Secretary of the United States Department of Transportation a “Joint 

Complaint in Opposition to New Terminal Charges at Los Angeles International 

Airport.” 

2

Respondents in this case are LAWA, the Los Angeles Board Of Airport Commissioners 

(“BOAC”), and the City Of Los Angeles, California (“City”). As used herein, LAWA 

refers to all Respondents. 
COMPLAINANTS’ AND RESPONDENTS’ JUNE 15, 2011 JOINT 

REPORT ON THE STATUS OF SETTLEMENT DISCUSSIONS

60129958_3.DOCX -2- 

January 18, 2010, additional comments with regard to the five issues remanded by the 

D.C. Circuit as set forth in the November 24 Notice. 

On January 11, 2010, the T1/T3 Airlines and LAWA filed a joint motion to 

extend deadlines in this proceeding in order to attempt to reach agreement on the issues 

identified in the Notice. In its January 21 Order, DOT granted the Parties’ motion to 

extend the deadline to provide written submissions on remaining written and evidentiary 

issues from January 18, 2010 to October 18, 2010, but directed the Parties to file periodic 

reports regarding the status of settlement negotiations. The first such report was due 

March 18, 2010, with successive reports to be filed approximately every 60 days 

thereafter. 

By the time of DOT’s January 21 Order, the T1/T3 Airlines and LAWA had 

already reached agreement on one of the five remanded issue identified by the November 

24 Notice; namely, the “[t]imeliness of [the] T1 Airlines’ objection to fair market 

valuation” used by LAWA in setting base rent (also known as the “Base Charge”) at 

LAX Terminal 1. November 24 Notice at 2. The four remaining D.C.-Circuit-remanded 

issues from the DOT’s November 24 are: 

• Airfield vs. non-airfield space. “We must therefore grant the Tl/T3 Airlines’ 

petition and again remand the matter to the DOT either to justify or to abandon its 

disparate treatment of airfield and non-airfield space.” 

• Other aeronautical uses of terminal space. “We grant the City's petition in this 

respect and direct the DOT on remand, either to justify or to abandon its objection 

to the City's considering non-aeronautical uses when setting terminal rents based 

upon FMV.” 

• Burden of persuasion on rentable space. “We therefore grant the City's petition to 

the extent of directing the DOT on remand to revisit the Tl/T3 Airlines’ complaint 

of discrimination and to apply to them the burden of persuasion that their 

disparate treatment is unjust.” 
COMPLAINANTS’ AND RESPONDENTS’ JUNE 15, 2011 JOINT 

REPORT ON THE STATUS OF SETTLEMENT DISCUSSIONS

60129958_3.DOCX -3- 

• Monopoly power. “On remand the DOT must explain why this case does not 

present the “extraordinary situation” in which alleged monopoly power is relevant 

to a fee dispute or, if it cannot, then go on to consider whether LAX had 

monopoly power in a relevant geographic market.” 

November 24 Notice at 2-3. 

 In a “Second Order” dated November 18, 2010 the DOT ordered the Parties to file 

a written status report and invited the parties to file, by January 17, 2011, written 

submissions on: 

 1. Whether the current record evidence on the four remaining remanded 

issues is sufficient or requires supplementation; 

 2. What, if any, additional fact finding or evidence is contemplated and for 

which of the remanded issues; 

 3. The justification for such additional fact finding or evidence; 

 4. Whether an oral evidentiary hearing is necessary to hear the new evidence, 

if any; and 

 5. Any other procedural or evidentiary issues the parties wish to note. 

 However, in response to a joint submission of the parties dated December 15, 

2010, which described efforts being made to resolve the outstanding disputes, the DOT, 

in its Third Order, agreed to stay the remand proceedings until August 1, 2011 to allow 

the parties additional time to attempt to resolve the remaining issues. The DOT also 

ordered the parties to file periodic Joint Status Reports, including this Report. 
COMPLAINANTS’ AND RESPONDENTS’ JUNE 15, 2011 JOINT 

REPORT ON THE STATUS OF SETTLEMENT DISCUSSIONS

60129958_3.DOCX -4- 

 DESCRIPTION OF SETTLEMENT DISCUSSIONS SINCE 

 THE APRIL 15, 2011 JOINT STATUS REPORT

Since the last Joint Status Report was submitted on April 15, 2011, the new lease 

for Alaska Airlines, Inc. (“Alaska”) in Terminal 6 – which was approved by the BOAC 

on April 4, 2011 – has been submitted to the Los Angeles City Council for approval. The 

new Alaska lease is on the agenda for the June 15, 2011 meeting of the Trade Commerce 

and Tourism Committee (TCT) of the City Council. If approved by the TCT, it will be 

voted on by the full City Council on June 22, 2011. 

The Settlement Agreement, a condition of which is approval of the new lease by 

the Los Angeles City Council, calls for Alaska to dismiss its claims in this proceeding 

with prejudice. After Alaska dismisses its claims, it will no longer be part of the carrier 

coalition pursuing this case. The Alaska/LAWA settlement will not resolve the 

remaining issues pertaining to the other carriers that are part of the T1/T3 coalition. 

Regarding Terminal 1 and the other carriers remaining at Terminal 3, when the 

most recent status report was provided to DOT on April 15, 2011, the T1/T3 

Airlines hoped that by June 15, 2011, there would have been tangible progress on the 

T1/T3 specific issues; unfortunately, that has not been the case, although there have been 

initial conversations between LAWA and each of the T1 airlines. 

On the other hand, LAWA maintains that progress is being made with regard to 

airport-wide issues. LAWA is currently engaged in discussions with all airlines at LAX, 

including the T1/T3 carriers, regarding airport-wide terminal charges, that, in LAWA’s 

belief, may render moot the terminal-specific concerns raised by the T1 and remaining T3 

Airlines.