UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

Washington, D.C. 

ALASKA AIRLINES, INC., et al., 

 v. 

LOS ANGELES WORLD AIRPORTS, LOS 

ANGELES BOARD OF AIRPORT 

COMMISSIONERS, and THE CITY OF LOS 

ANGELES, CALIFORNIA.

Docket No. 

OST-2007-27331 

COMPLAINANTS’ AND RESPONDENTS’ 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 

Kelly Martin 

 General Counsel, Los Angeles World 

Airports 

Raymond S. Ilgunas 

 Assistant General Counsel 

Lynn Mayo 

 Deputy City Attorney 

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’ JOINT 

REPORT ON THE STATUS OF SETTLEMENT DISCUSSIONS

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 Affairs 

US AIRWAYS GROUP, INC. 

1401 H Street, N.W. 

Suite 1075 

Washington, DC 20005 

Thomas R. O’Grady 

Staff Vice President, Commercial 

and Regulatory Law 

ALASKA AIRLINES, INC. 

19300 International Blvd. 

Seattle, Washington 98188-5303 

Jacqueline Peter 

Counsel 

FRONTIER AIRLINES, INC. 

7001 Tower Road 

Denver, Colorado 80249 

Richard P. Magurno 

Senior Vice President, General 

Counsel & Secretary 

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 

Frontier Airlines, Inc.

DATED: March 18, 2010 
COMPLAINANTS’ AND RESPONDENTS’ JOINT 

REPORT ON THE STATUS OF SETTLEMENT DISCUSSIONS

1 

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

the “Parties”) hereby jointly file a status report, in conformity with DOT’s “Order 

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

Comments,” Order 2010-01-14 (“January 21 Order”), regarding the settlement of certain 

procedural and evidentiary issues relating to the remanded issues as set forth in DOT’s 

Order 2009-11-24 (“November 24 Notice”) and Order 2009-12-17 (“December 22 

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 

Department of Transportation (“DOT”) issued the November 24 Notice in this case. 

DOT’s 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 December 22 Order, directing the Parties to file, no 

 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 the 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’ JOINT 

REPORT ON THE STATUS OF SETTLEMENT DISCUSSIONS

2 

later than 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 is due March 

18, 2010. 

DESCRIPTION OF SETTLEMENT DISCUSSIONS 

SINCE THE JANUARY 21 ORDER 

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 — 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. DOT’s November 24 Notice identified four 

additional issues for consideration on remand. Since January 11, 2010, the T1/T3 

Airlines and LAWA have undertaken the following steps towards resolving those four 

issues. 

First, the airline members of the Airport-Airline Affairs Committee3

 (a.k.a. the 

Airline-Airport Affairs Committee) (“AAAC”) have created a “Subcommittee for 

Finance” consisting of airlines that have an interest in issues relating to rates and charges 

at LAX. Airlines that are members of that Subcommittee include airlines with long-term 

 3

 Every air carrier and foreign air carrier operating at LAX is a member of the AAAC. 
COMPLAINANTS’ AND RESPONDENTS’ JOINT 

REPORT ON THE STATUS OF SETTLEMENT DISCUSSIONS

3 

leases, airlines that have recently signed leases, and airlines that are operating at LAX 

pursuant to the existing Tariff (portions of which the T1/T3 Airlines challenged). The 

T1/T3 Airlines on the Subcommittee for Finance include Alaska Airlines, Inc, Southwest 

Airlines Co. and US Airways Group. The Subcommittee for Finance reports to the 

AAAC. 

The Subcommittee for Finance and LAWA held their first bilateral meeting on 

February 24, 2010. During this initial meeting, LAWA identified the following goals for 

discussion with the Subcommittee: (1) making some administrative changes to the 

existing Tariff; (2) memorializing in the existing Tariff the terms in the letter agreements 

between LAWA and some of the T1/T3 Airlines; and (3) taking steps to achieve more 

uniformity of charges collected throughout LAX, such as existing joint use charges and 

existing federal inspections services (“FIS”) charges, as well as implementing a unified 

capital charge (with the ability to impose an extraordinary coverage charge to ensure that 

LAWA will always remain in the position to pay its bondholders). The AAAC 

Subcommittee for Finance and LAWA are scheduled to meet next during the week of 

March 25, at which time discussions on these topics are scheduled to continue. 

Second, LAWA and Alaska Airlines. Inc. (one of the T1/T3 Airlines) have had 

discussions about the airline making significant investments in one of the LAX terminals 

and a lease that would be entered into pursuant to that undertaking which would resolve 

all pending disputes between that airline and LAWA, including the remand issues. In 

addition, LAWA and another one of the T1/T3 Airlines have engaged in discusions about 

that airline relocating to a new terminal. 


CERTIFICATE OF SERVICE FOR COMPLAINANTS’ AND RESPONDENTS’ 

JOINT REPORT ON THE STATUS OF SETTLEMENT DISCUSSIONS

CERTIFICATE OF SERVICE 

I, John David Taliaferro, hereby certify that on March 18, 2010, I caused to be 

served by email, a true and correct copy of the foregoing COMPLAINANTS’ AND 

RESPONDENTS’ JOINT REPORT ON THE STATUS OF SETTLEMENT 

NEGOTIATIONS on the following: 

M. Roy Goldberg, Esq. 

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. 

David A. Berg, Esq. 

AIR TRANSPORT ASSOCIATION 

OF AMERICA 

1301 Pennsylvania Ave., NW 

Washington, DC 20004 

Phone: (202) 626-4234 

Fax: (202) 626-4139 

dberg@airlines.org

Robert P. Silverberg, Esq. 

SILVERBERG, GOLDMAN & 

BIKOFF, LLP 

1101 30th Street, NW, Suite 120 

Washington, DC 20007 

Phone: (202) 944-3304 

Fax: (202) 944-3306 

rsilverberg@sgbdc.com

Counsel for ATA 

Scott P. Lewis, Esq. 

ANDERSON & KREIGER LLP

One Canal Park 

Suite 200 

Cambridge, MA 02141 

Phone: (617) 621-6560 

Fax: (617) 621-6660 

slewis@andersonkreiger.com

Monica Hargrove Kemp, Esq. 

AIRPORTS COUNCIL INTERNATIONAL 

 - NORTH AMERICA

1775 K Street, NW 

Washington, DC 20006 

Phone: (202) 293-8500 

Fax: (202) 331-1362

mkemp@aci-na.org

Counsel for ACI-NA