UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Civil Action No. 13-cv-1236 (CKK)

MEMORANDUM OPINION

(April 25, 2014)

Presently before the Court is the United States’ [161] Motion for Entry of the Proposed 

Final Judgment. Upon consideration of the pleadings1

, 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 US 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 

 1 Am. Compl., ECF No. [73]; Competitive Impact Statement, ECF No. [148] (“CIS”); 

Response of Pl. United States to Public Comments on the Proposed Final Judgment, ECF No. 

[159] (“Gov’t Resp.”); Pl. United States of America’s Mot. and Mem. for Entry of the Proposed 

Final Judgment, ECF No. [161] (“Gov’t Mot.”); Proposed Final Judgment, ECF No. [161-1] 

(“PFJ”); Brief of the Am. Antitrust Inst. as Amicus Curiae to Reply to the Response of Pl. United 

States to Public Comments on the Proposed Final Judgment, ECF No. [163-1] (“AAI Amicus 

Brief”); Brief of Amici Curiae, Carolyn Fjord, et al., in Opp’n to Pl.’s Mot. for Entry of 

Proposed Final Judgment and in Reply to Pl.’s Response to Public Comments on the Proposed 

Final Judgment, ECF No. [165], Ex. A (“Fjord Amicus Brief”). 

UNITED STATES OF AMERICA, et al.

Plaintiffs,

v.

US AIRWAYS GROUP, INC., et al.

 Defendants.
2

Worth, Texas. Id. Defendant AMR Corporation was the parent company of American Airlines. 

Id. In the year 2012, American flew over eighty million passengers to approximately 250 

locations worldwide, taking in more than $24 billion in revenue. Id. US 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 Complaint3 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 

 2 Michigan joined the Plaintiffs on September 5, 2013, and Texas withdrew from the 

lawsuit on October 1, 2013, after reaching a settlement with Defendants. See Am. Compl; Pl. 

State of Texas’s Mot. to Voluntarily Dismiss its Claims With Prejudice, ECF No. [95]. 

Accordingly, as used in this opinion, “Plaintiff States” refers to Arizona, Florida, Michigan, 

Tennessee, Pennsylvania, Virginia, and the District of Columbia.

3

 Given that the Amended Complaint is the operative complaint in this action, unless 

otherwise specified, the term “Complaint” in this opinion refers to the Amended Complaint filed 

on September 5, 2013. 
3

Defendants are required to divest or transfer to purchasers approved by the United States, in 

consultation with the Plaintiff States: 

• 104 air carrier slots4 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; 

• 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

• 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 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.

 4 Both Reagan National and LaGuardia are subject to slot limitations governed by the 

FAA, which limit the number of take-offs and landings at each of these airports. CIS at 7. Slots 

at Reagan National are designated as either “air carrier,” which may be operated with any size 

aircraft that meets the operational requirements of the airport, or “commuter” which must be 

operated using aircraft with seventy-six seats or fewer. Id. at 2 n. 2.
4

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 
5

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. US 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 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, US Airways, Inc. and United States Department of Justice, In re AMR Corp., No. 11-

15463 (Bankr. S.D.N.Y. Nov. 27, 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 
6

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 
7

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 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 (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 
8

also United States v. Republic Serv., 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.”).

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 
9

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 
10

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 US 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 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 US Airways and American had indicated their intent to disrupt such coordination 

among legacy carriers. US 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 
11

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 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, 
12

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, 
13

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
14

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 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, US 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. 
15

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 proposed remedies”); Archer-Daniels-Midland, 272 F.Supp.2d at 6 (noting that “[a] district 
16

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 
17

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.

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 
18

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 US 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 
19

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. 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).
20

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 
21

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 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 
22

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 
23

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 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.
24

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 block LCC access at this 

airport. Gov’t Resp. 46-47. Accordingly, modification of the Final Judgment is unnecessary. 
25

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 (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 
26

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 (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 

separate Order accompanies this Memorandum Opinion. 

 /s/ 

COLLEEN KOLLAR-KOTELLY

UNITED STATES DISTRICT JUDGE