UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION 

## it E OF TIIE SECRETARY Washington, D.C.

Docket No.

OST-2007-27331 ALASKA AIRLINES, INC., 

### etal., V. LOS ANGELES 14 ORLI) AIRPORTS, LOS ANGELES BOARD OF AIRPORT COMMISSIONERS, and THE CITY OF LOS ANGELES, CALIFORNIA.

COMPLAINANTS' AND RESPONDENTS' JOINT REPORT ON THE STATUS OF SETTLEMENT DISCUSSIONS

Steven S. Rosenthal Jeffery A. Tornasevich 3.1). Taliaferro KAYE SCHOLER 901 Fifteenth Street, NW Washington. DC 200O5 Phone (202) 682-3500 Fax: (202) 682-3580 srosenthakavescho er.eom jtornasevichkavescholer.com jtaliaferroqk.avescholer.com Carmen A. Trutanich Los Angeles City Attorney Kelly Martin Generai Counsel. Los Aneles World Airports Raymond S. ligunas Assistant General Counsel Los ANGELLS CITY ATTORNFY

- S OFFICF, Los :Angeles World Airports One World Way Los Angeles, CA 90045 Phone: (424) 646-5010 Counce 1), . • I

A.c.sponc,ents M. Roy Goldberg SHEPPARD :MULLIN RICHTER & I IAMPTON 1100 I Street, NW Suite 1100 East Washington, DC 20005-3314 Phone: (202) 218-0007 Fax: (202) 218-0020 moldbentrcishepoardmullin.com Counsel lbr: Alaska Airlines. Inc. AirTrun A /mays, Inc. ATA Airlines, Inc. Frontier Airline.s, 

## Midiesi Airlines Inc. Southwest Airlines Co. US Airways Group, Inc.COMPLAINANTS' AND RESPONDENTS' JOINT

RF::'ORT ON rm. s r,vr us OF SETTLEMENT DISCUSS/ONS Robert W. Kneisley Associate General Counsel Leslie Abbott Attorney SOUTHWEST AIRLINES CO. 1901 I, Street, N.W. Suite 640 Washington, DC 20036 I Inward Kass Vice President, Legal Affairs US AIRWAYS GROUP, INC. 1401 If Street. N.W. Suite 1075 Washington, DC 20005 Thomas R. 0-Cirady Deputy General Counsel ALASKA AIRLINES, !NC. 19300 International Blvd. Seattle, Washington 98188-5303 Jacqueline r Counsel FRONTIER AIRLINES, INC. 7001 Tower Road Denver, Colorado 80249 Richard P. MailLIMO Senior Vice President. General Counsel & Secretary AIRMAN AIRWAYS, INC, 9955 AirTran Boulevard Orlando, Florida 32827 Edward P. Faberman WILF :v RFIN I LP 1776 K Street. N.W. Washinaton, DC 20006 (.onnsel Air D

. an p'ays Frontier Airlines, Inc. DATED: N 16, 2010COMPLAINANTS' AND RESPONDENTS' JOINI

REPORT ON 'FITE STATUS OF SETTLEMENT DISCUSSIONS

The TI '13 Airlines' and Los Angeles World Airports 2 -LAWA") (collectively, the "Parties") hereb y jointly file a status report. in conformit y ith DOT's "Order Granting an interim Stay of Proceedin g s and Extendin g Deadline to File Procedural Comments." Order 2010-01-14 ("January 21 Order ri-wardin g . he settlement of certain procedural and evidentiary issues relating to the remanded issues as set forth in DOT., Order 2009-1 1-24 ("November 24 Notice") and Order • 009-12-17 (' December 22 Order").
BACKGROUND On November 24. 2 009, following remand of certain is s u2s by the United States Court of Appeals for the District of Columbia Circuit the -D.C. Circuit"), the Department olTransportulion ("DOT") issued the November 24 Notice in this case.
DOT's November 24 Notice directed the Ti -11 3 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. Following LAWA's and the Ti/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, Durin g that eai: the Parties discussed additional procedural issues, and DOT subsequently issued the December 22 Order, directing the Parties to file,no
The Ti ;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 I:ansportation a -Joint Complaint in Opposition to New Terminai Char g es at Los Angel-s International Airport." 2 Respondents in this case are the LAWA. the Los Aneeles Board Of Airport Commissioners ("1-30:\C"), and the City

. Or Los Angeles, Cali 1

- ornia ("Ci .As 'sod herein, LAWA refers to all Respondents,COMPLAINANTS' AND RESPONDENTS' JOINT

REPORT ()T sTATus OF SEITLEMENT DISCUSSIONS later than Januar y 18, 2010, additional comments with re g ard to t-ie five issues remanded by the D.C. Circuit as set forth in the November 24 Notice. On January 11, 2010. the T1/13 Airlines and LAWA filed a joint motion to extend deadlines in this proceedin g in order to attempt to reach agreement on the issues identified in the Notice. In its January 21 Order, 1)01 granted the Parties' motion to extend the deadline to provide written submissions on remaining written and evidentiary issues from January 2010 to October 18. 2010, but directed the Parties to tile periodic reports regarding the status of settlement ne g otiations. 'Fife first such report was due March 18, 2010, with successive reports to be filed approximatel y every 60 days thereafter.
DESCRIPTION OF SETTLEMENT DISCUSSIONS SINCE THE I) ARTIES MAY 17, 2010 JOINT STATUS REPORT B y the time of DOT's January 21 Order. the 11113 Airlines and LAWA had already reached agreement on one of the five remanded issue identified by the November 24 Notice - - the ol the] T1 Airlines objection to fair market valuation" used by LAWA in setting base rent (also known as the -Base Char g e ) at 1.AX Terminal I. November 24 Notice at 2. DOT's November 24 Nctice identirleci four additional issues for consideration on remand. Since January ii. 2010. the TI/T3 Airlines and LAWA have undertaken the followin g steps towards resolving those four
issues. The Parties' March 18, 2010 Status Report notified DOT that the airline members of the Airpoi Affairs Commi ("AAAC") have created a "Subcommittee for Finance" consisti ff. ofairlines that have an interest in issues reinn to rates and charges .ery air carrier and foreign air carrier operating at LAX i a member of the AAAC.

2COMPLAINANTS' AND R;:SPONDENTS' JOINT

?0:-(1
. ON THF. STATES OF SETTLEMENT DISCE'SSIONS at LAX. Airlines that are members of' that Subcommittee include airlines with long-term leases. airlines that have recently signed leases, and airlines that are operating_ at LAX pursuant to the existin g Tariff (portions of which the TI/T3 Airlines challenged). The TI/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. TheParties' March 18, 2010 joint Status Report described the first meeting between the Subcommittee for Finance and LAWA„ and described a framework for ongoing discussions between the Subcommittee and LAWA. The Parties' March 18, 2010 Joint Status Report also described ongoin g discussions between LAWA and several
of the T 1 /T3 Airlines that were conducted on an individual basis. The Parties' May 17, 2010 Joint Status Repo., informed DOT that LAWA was continuing i ts one-on-one discussions with several of the 1111

. 3 Airlines anj that LAWA management was scheduled to meet with the Chair of the Subcommittee for Finance on May 24, 2010. Since the Parties' last report, I.AWA mana g ement and the Chair of the Subcommittee for Finance did meet on May 24, 2010. At that meetin g , J..AWA discussed
g enerally the global changes it wishes to address in the Tariff and se, plans for a future meeting to nrovide an in depth presentation to the full Subcommittee as a precursor to discussions with the full AAAC membership. WA mana g ement and the Subcommittee iar Finance are scheduled to meet on July 27, 2010 to !lather discuss these proposed g iohal chan g es to the TariffCOMPLAINANTS' ND RESPONDENTS' .10INT

IZ.1:1)0R

. I

. ON THE SLITS OF SETTLEMENT DISCUSSIONS

In addition, since We last report, LA WA has been continunw its one-on-one discussions with several of the T3 Airlines.! Towever, to date, the Ti Airlines and LAWA have made no progress on settling any of the outstanding issues, despite the professed desire by caeh or the Parties to do so, The Parties remain interested in trying to resolve the four remaining remand issues on or before October 18, 2010.

4Dated: July 16 2010 1Zesnectfullv suhmitte

1 M. Roy Giolperv. SIlEPPA4Z.1) MULLIN RICHTER. 151.: IIAN1P LIP 1300 1 Street, NW Suite 1100 East 1,Vashin g lon, IX: 20005-3314 Phone: (202) 218-0007 Fax: (202) 218-0020 ruoldberg sheppardmullin.corn C'ounsel ./Or: Alaska Airlines, Inc. Air Iran Airways, Inc. ATA A irlincs. Inc. Frontier Airlines. Inc. illidwe.s1 Airlines. Inc. Southwest Air/ine.s

. ( 'a, US Airways Group, Inc

Robert W. Kneisley Associate General Counsel Leslie Abbott Attorney SOLTHWLST AIRLINES CO. 1901 I. Street. NAV. Suite 640 Washington, DC 20036 COMPLA/NANTS' AND RESPONDENTS JOINT REPORT ON THE STATUS OF SETTLEMENT DISCISSIONS

Steven S. Rosenthal Jeffery A. Tomasevich ID. Talialerro KAYF. SCHOLER 901 Fifteenth Street, NW Washington. DC 20005 Phone (202) 682-3500 Fax: (202) 682-3580 email: srosenthar;:i. kaveseholer.com itornasevichrid(aveseholer.com jtalialerroAskavescholer.com Carmen A. Trutanich Los Angeles City Attorney Kell y Martin General Counsel, EAWA Raymond S. ilgunas Assistant General C'eunsel Los Angeles City Attorney's Office One World Way Los Angeles. CA 90045 Phone: (424) 646-5010 Counsel

. (Or RespondentsRichard I). N.1a2,urno

Senior Vice President. General Counsel & Secretary AIRTRAN AIRWAYS, INC. 9955 Air! ran Boulevard Orlando. Florida 32827 COMPLAINANTS' AND RESPONDENTS' JOINT REPORT ON THE STATUS OF SETTLEMENT DISCUSSIONS

Howard Kass Vice President, Leizal Affairs LS AIRWAYS GROITP. INC. 1401 II Street. N.W. Suite 1075 Washin g ton, DC 20005

Thomas R. O'Grady Deputy General Counsel ALASKA AIRLINES. INC. 19300 international Blvd. Seattle. Washington 98188-5303

Jacqueline Peter Counsel FRONTIER AIRLINES, INC. 7001 Tower Road Denver. Colorado 80249

Pid\.ard P laberrnan 1 .,VILEY REIN LIT 1776 K Street. N.W. Washington. DC 20006 Counsel/or: Ai • 710,7.1inrcrys 1:7'0711ler Inc

6CERTIFICATE OF SERVICE FOR COMPLAINANTS' AND RESPONDENTS'

JOINT REPORT ON THE ST..kTUS OF SETTLEMENT DISCUSSIONS CERTIFICATE OF SERVICE I. Stephmic Cohen, hereby certify that on July 16. 2010. 1 caused to be served by email, a true and correct copy ol the foreuoinLt COMPLAINANTS AND RESPONDENTS' JOINT REPORT ON THE STATUS OF SETTLEMENT NEGOTIATIONS on The following: M. Roy Goldberg..sq. SIII-IPPARD MULLIN R.ICI ITER &11AMPION LLP 1300 I Street. NW Suite 1100 East Washington, DC 20005-3314 Phone: (202) 218-0007 Fax: (202) 218-0020

shenpardmullin.com Counsel for: Alaska Airlines. Inc. AirTran A irway.s.. 1.1 A Airlines. Inc. Froniier Airlines, Inc. ..Vficlwest .4irlines. Southwest A irline.s

. Co. US Airwa y s . Group, David A. Ber g . Hsq. AIR TRANSPORT ASSOCIATION OF AMERICA 1301 Pennsylvania Ave., NW Washington. DC 20004 Phone: (202) 626-4234 Fax: (202) 626-4139 dber2/d:airlines.orp. Robert P. Silverber g . E SILVERBERG, (1OLDM.AN & B1KOFF. LI.P 1:01 30th Street. NW, Suite 120 'Washin g ton, DC 20007 P.hone: (202) 944-3304 Fax: (202) 944-3306 

### rsilverbenl'a s .dc.com Scott P. Lewis. Esq. ANDERSON c c

.<:. KREIGER LIP One Canal Park Suite 200 Cambridge, MA 02141 Phone: (617) 621-6560 Fax: (617) 621-6660 siewis.T/3:andersonkret.ter.com Monica lian2rove Kemp, 1:,sq. A1RPOR FS COUNCIL IN:VERNA 1:0NAL NORT! AMERICA 1775 K Street, NW Washington. DC 20006 Phone: (202) 293-8300 Fax: (202) 331-1367 mkern_pra,. 'aci-na.or
C'ounsel

Counselji.w...17:4cphailie Cohen

CERTIFICATE OF SERVICE FOR (.:0N1I'LAINANTS' AND RESPONDEN .110INT REPORT ON THE STATUS OF sET-1-1.xmENT Disc:ussioNs

In addition, I caused a true and correct copy of the foregoing COM PI,A I NANTS AND RESPONDENTS' JOINT REPORT ONTHE STATUS OF SETTLEMENT NEGOTIATIONS to be emailcd to Mary F. Withum. Esq., Office of the General Counsel. Department orrransportation, at mary.withum In addition, I caused to he filed electronically one copy of the foregoing COMPLAINANTS AND RESPONDEN FS' JOINT REPORT ON THE STATUS OF' SETTLEMENT NEGOTIATIONS in Docket Number DOT-OST-2007-2733 I in the Federal Docket Manauement System (FDMS) at http://www.Re2tdations.goy .