Fjord et al v. AMR Corporation et al

UNITED STATES BANKRUPTCY COURT 	FOR PUBLICATION
SOUTHERN DISTRICT OF NEW YORK
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In re: 	Chapter 11
AMR CORPORATION, et al., 	Case No. 11-15463 (SHL)
Reorganized Debtors. 	(Confirmed)
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CAROLYN FJORD, et al.,
Plaintiffs
v. 	Adv. No. 13-01392 (SHL)
AMR CORPORATION, et al.,
Defendants.
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MEMORANDUM OF DECISION
A P P E A R A N C E S :
LATHAM & WATKINS
Counsel for Defendant Merged Entity American Airlines Group Inc.
505 Montgomery Street, Suite 2000
San Francisco, CA 94111
By: 	Daniel M. Wall, Esq.
Sadik Huseny, Esq.
ALIOTO LAW FIRM
Counsel for the Clayton Act Plaintiffs
One Sansome Street, 35th Floor
San Francisco, CA 94104
By: 	Joseph M. Alioto, Esq.
Jamie L. Miller, Esq.
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MESSINA LAW FIRM, P.C.
Counsel for the Clayton Act Plaintiffs
961 Holmdel Road
Holmdel, NJ 07733
By: 	Gil D. Messina, Esq.
NEDEAU LAW FIRM
Counsel for the Clayton Act Plaintiffs
154 Baker Street
San Francisco, CA 94117
By: 	Christopher A. Nedeau, Esq.
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TABLE OF CONTENTS
BACKGROUND ........................................................................................................................... 2
I. 	PROCEDURAL HISTORY .......................................................................................... 2
A. 	The Chapter 11 Cases and the Proposed Merger ....................................................... 2
B. 	The Filing of this Adversary Proceeding and the Department of Justice Lawsuit .... 3
C. 	Plaintiffs’ Request for a Temporary Restraining Order ............................................. 6
D. 	Confirmation and the Consummation of the Merger ................................................. 7
E. 	Plaintiffs’ Motions to Amend the Complaint............................................................. 7
F. 	The Plaintiffs’ Expert Witness – Dr. Carl Lundgren ............................................... 10
G. 	The Parties’ Cross-Motions for Summary Judgment............................................... 12
H. 	Further Pretrial Procedure ........................................................................................ 15
I. 	Trial and Related Filings.......................................................................................... 17
II. 	THE PRE-MERGER AIRLINE INDUSTRY ........................................................... 19
A. 	Deregulation and the Structural Dynamics of the Airline Industry ......................... 19
B. 	External Shocks to the Airline Industry ................................................................... 22
C. 	Mergers and Restructurings of Other Airline Carriers ............................................ 22
D. 	Competitiveness of American and US Airways ...................................................... 24
III. 	THE PREDICTED BENEFITS OF THE PROPOSED MERGER ON THE
AIRLINE INDUSTRY ........................................................................................................... 25
A. 	Strengthened Competitive Position for American and US Airways ........................ 25
B. 	Pro-Competitive Benefits for Consumers ................................................................ 26
C. 	Anticipated Impact on Competition in the Airline Industry Generally ................... 27
IV. 	THE POST-MERGER EFFECTS ON THE AIRLINE INDUSTRY ..................... 28
A. 	Expansion of Capacity and Impact on Prices .......................................................... 28
B. 	Improvements in Infrastructure and Fleet Utilization .............................................. 31
C. 	Continued Growth and Impact of Low-Cost Carriers.............................................. 32
V. 	THE PLAINTIFFS’ CASE ......................................................................................... 34
A. 	Plaintiffs’ Lay Witness Testimony .......................................................................... 34
B. 	Plaintiffs’ Expert Witness Testimony ...................................................................... 38
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VI. 	THE DEFENDANTS’ CASE ...................................................................................... 39
DISCUSSION .............................................................................................................................. 42
I. 	THE GOVERNING LEGAL FRAMEWORK ......................................................... 42
II. 	APPLICATION OF THE BAKER HUGHES STANDARD .................................... 46
A. 	Relevant Market Definition and Plaintiffs’ Standing .............................................. 46
B. 	Post-Merger Evidence.............................................................................................. 49
C. 	Plaintiffs’ Prima Facie Case .................................................................................... 52
D. 	Defendants’ Rebuttal Case ....................................................................................... 54
E. 	Plaintiffs’ Additional Evidence of Anticompetitive Effects .................................... 70
CONCLUSION ........................................................................................................................... 80
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SEAN H. LANE
UNITED STATES BANKRUPTCY JUDGE
Before the Court are the merits of the First Amended Complaint (the “First Amended
Complaint”) [Adv. Proc. ECF No. 103] of the plaintiffs (the “Plaintiffs”)1 in the above-captioned
adversary proceeding. The Plaintiffs allege that the merger (the “Merger”) between AMR
Corporation (“AMR”) and US Airways Group, Inc. (“US Airways”)—which ultimately formed
American Airlines Group Inc. (“AAG” or the “Defendants”)2 —violates Section 7 of the Clayton
Antitrust Act, 15 U.S.C. § 18 (the “Clayton Antitrust Act”).3 Accordingly, the Plaintiffs seek,
among other things, a final judgment of divestiture to unwind the Merger as well as injunctive
relief to enjoin any future mergers pursuant to Section 16 of the Clayton Antitrust Act, 15 U.S.C.
§ 26. The Court held a trial on the Plaintiffs’ Section 7 claim as it had been narrowed by the
Court’s prior rulings in the case, including the parties’ summary judgment motions discussed in
greater detail below. For the reasons set forth below, the Court denies the Plaintiffs’ requested
1 	The Plaintiffs in this adversary proceeding are: Carolyn Fjord, Katherine R. Arcell, Keith Dean Bradt, Judy
Bray, José M. Brito, Jan Marie Brown, Robert D. Conway, Judy Crandall, Rosemary D’Augusta, Brenda K. Davis,
Pamela Faust, Don Freeland, Donald V. Fry, Gabriel Garavanian, Harry Garavanian, Yvonne Jocelyn Gardner, Lee
M. Gentry, Valarie Ann Jolly, Gail S. Kosach, Michael C. Malaney, Len Marazzo, Lisa McCarthy, Patricia Ann
Meeuwsen, L. West Oehmig, Jr., Cynthia Prosterman, Deborah M. Pulfer, Dana L. Robinson, Robert A. Rosenthal,
Bill Rubinsohn, Sondra K. Russell, Sylvia N. Sparks, June Stansbury, Clyde D. Stensrud, Wayne Taleff, Gary
Talewsky, Annette M. Tippetts, Diana Lynn Ultican, J. Michael Walker, Pamela S. Ward, and Christine O. Whalen.
See First Amended Complaint ¶ 9.
2 	The Plaintiffs’ initial complaint was filed against AMR, American Airlines, Inc., US Airways, and US
Airways, Inc. that have since merged into the single entity, AAG. See Complaint for Injunctive Relief Against
Violation of Section 7 of the Clayton Antitrust Act [Adv. Proc. ECF No. 1]. For purposes of consistency with the
Court’s prior rulings, the Court shall continue to refer to AAG as the “Defendants” rather than the “Defendant.”
3 	The preamble to the First Amended Complaint indicates that the Plaintiffs also filed this action to “prevent
a threatened violation of Section 2(c) of the [Robinson-Patman Act], 15 U.S.C. § 13(c),” which prohibits false
commissions or brokerage fees as a disguised form of price discrimination. First Amended Complaint at 2. As the
Court previously granted the Defendants’ motion for summary judgment with respect to the Plaintiffs’ Section 2(c)
claim, this claim is not the subject of this decision. See Aug. 29, 2018 Hr’g Tr. at 79:17–25 [Adv. Proc. ECF No.
177]; Order Granting in Part and Denying in Part Defendants’ Motion for Summary Judgment and Denying
Plaintiffs’ Cross-Motion for Summary Judgment [Adv. Proc. ECF No. 176].
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relief and grants judgment to the Defendants. The following constitutes the Court’s findings of
fact and conclusions of law after trial, including relevant procedural background in the case.4
BACKGROUND
I. 	PROCEDURAL HISTORY
A. The Chapter 11 Cases and the Proposed Merger
In late November 2011, AMR and certain of its affiliates and subsidiaries (collectively,
the “Debtors”) filed a voluntary petition for Chapter 11 relief in the United States Bankruptcy
Court for the Southern District of New York. See Voluntary Petition [Case No. 11-15463, ECF
No. 1]; Plaintiffs Carolyn Fjord, et. al.’s and Defendant American Airlines Group Inc.’s
Stipulation of Undisputed Facts ¶ 7 [Adv. Proc. ECF No. 214-1] (the “Undisputed Facts”). The
Debtors initially contemplated reorganizing in Chapter 11 as a standalone entity. See In re AMR
Corp., et al., 477 B.R. 384, 417 (Bankr. S.D.N.Y. 2012) (“AMR I”) (holding that “American’s
Business Plan is a reasonable stand-alone business strategy to serve as the basis for American’s
Section 1113 Motion”). Ultimately, the Debtors—with the support of the Official Committee of
Unsecured Creditors—pivoted to a reorganization predicated upon a merger between AMR and
US Airways that would ultimately result in the combined entity, AAG, which would continue to
operate under the “American Airlines” name. 	See In re AMR Corp., et al., 490 B.R. 158, 160
4 	Defendants sought to seal certain witness statements and later, certain portions of the witness statement of
Janusz A. Ordover concerning data with respect to fares, ticketing data, pricing information and pricing trends. See
Notice of Defendant American Airlines Group Inc.’s Motion for Entry of Order Pursuant to 11 U.S.C. § 107(b) and
Fed. R. Bankr. P. 9018 Authorizing the Filing of Certain Information Provisionally Under Seal in Connection with
Defendant American Airlines Group Inc.’s Witness Statements [Adv. Proc. ECF No. 246]; Defendant American
Airlines Group Inc.’s Motion for Entry of Order Pursuant to 11 U.S.C. § 107(b) and Fed. R. Bankr. P. 9018
Authorizing the Filing of Certain Information Under Seal in Connection with the Witness Statement of Janusz A.
Ordover [Adv. Proc. ECF No. 261]. In response to the Defendants’ requests, the Court entered an order sealing
portions of Janusz A. Ordover’s witness statement. See Order Pursuant to 11 U.S.C. § 107(b) and Fed. R. Bankr. P.
9018 Authorizing the Filing of Certain Information Under Seal in Connection with the Witness Statement of Janusz
A. Ordover [Adv. Proc. ECF No. 266] (the “Ordover Sealing Order”). Nothing in this decision implicates the
information set forth in the Ordover Sealing Order. Coupled with the conduct of trial and the public filing of the
trial transcripts, the Court concludes that there is nothing in this decision that requires sealing. See Order
Designating Official Real-Time Trial Transcripts [Adv. Proc. ECF No. 282].
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(Bankr. S.D.N.Y. 2013) (“AMR II”) (describing the then-proposed merger between AMR and US
Airways that would establish the “American Airlines Group Inc.”). Prior to the Merger, US
Airways was a Delaware corporation and holding company whose primary business was the
operation of a network of air carriers through its subsidiaries that included, among others, US
Airways Inc. See Undisputed Facts ¶¶ 5–6. On February 13, 2013, the Debtors entered into an
agreement and plan of merger with US Airways which the Court approved on May 10, 2013.
See Order Authorizing and Approving (I) Merger Agreement Among AMR Corporation, AMR
Merger Sub, Inc., and US Airways Group, Inc., (II) Debtors’ Execution of and Performance
Under Merger Agreement, (III) Certain Employee Compensation and Benefit Arrangements,
(IV) Termination Fees, and (V) Related Relief [Case No. 11-15463, ECF No. 8096]. Shortly
thereafter, on June 5, 2013, the Debtors filed the Second Amended Joint Chapter 11 Plan, which
was predicated upon the Merger. See Second Amended Joint Chapter 11 Plan [Case No. 11-
15463, ECF No. 8590].
B. The Filing of this Adversary Proceeding and the Department of Justice Lawsuit
The Plaintiffs commenced this adversary proceeding in the Debtors’ Chapter 11 cases in
August 2013. They alleged that the proposed Merger between AMR and US Airways would
violate Section 7 of the Clayton Antitrust Act, as its “effect . . . may be substantially to lessen
competition, or to tend to create a monopoly in the transportation of airline passengers in the
United States.” Complaint for Injunctive Relief Against Violation of Section 7 of the Clayton
Antitrust Act ¶ 166 [Adv. Proc. ECF No. 1] (the “Initial Complaint”); see also id. at ¶¶ 1–5.
Accordingly, the Plaintiffs sought preliminary and permanent injunctive relief to enjoin the
Debtors from consummating the Merger and/or requiring divestiture as well as the Plaintiffs’
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recovery of legal and reasonable attorneys’ fees pursuant to Section 16 of the Clayton Antitrust
Act, 15 U.S.C. § 26.5 Id. at 25.
Shortly after the commencement of the Plaintiffs’ adversary proceeding, the United
States Department of Justice (the “DOJ”), joined by several states (together with the DOJ, the
“DOJ Plaintiffs”), filed a complaint against AMR and US Airways in the U.S. District Court for
the District of Columbia seeking to enjoin the Merger (the “DOJ Proceeding”). See Complaint,
United States, et al. v. US Airways Grp., Inc., et al., No. 13-CV-01236 (D.D.C. Aug. 13, 2013),
ECF No. 1 (the “DOJ Complaint”); Undisputed Facts ¶ 9. Alleging that the Merger would
violate Section 7 of the Clayton Antitrust Act, the DOJ Plaintiffs asserted that the effect of the
Merger would “likely . . . be to lessen competition substantially, or tend to create a monopoly, in
interstate trade and commerce in the relevant markets” which were defined to be “city pair[s],”
comprised of a “flight’s departure and arrival cities.” DOJ Complaint ¶¶ 26, 28, 95. The DOJ
Plaintiffs asserted that the Merger, among other things, would result in a substantial dampening
of competition among network airlines in these city pairs, thereby leading to an increase in
prices, a reduction in output, and a lessening of service. See id. ¶ 96. Such predicted effects
were argued to be most pronounced at Ronald Reagan Washington National Airport due to its
requirement of “slots for takeoffs and landings” that would ultimately restrict new entry. Id. ¶¶
30–31; see also id. ¶¶ 10, 84–86, 96.
The DOJ Plaintiffs utilized the Herfindahl-Hirschman Index (“HHI”) as a measurement
for market concentration, which is generally calculated as the sum of the squares of market
5 	Both the Plaintiffs and the Defendants agreed that the Court has jurisdiction over these matters, that this
proceeding is a “core proceeding” under 28 U.S.C. § 157(b)(2), and that venue is proper pursuant to 28 U.S.C. §§
1408 and 1409. See Initial Complaint ¶¶ 6–8; Defendant US Airways’ Answer to Complaint for Injunctive Relief
Against Violation of Section 7 of the Clayton Antitrust Act ¶¶ 6–8 [Adv. Proc. ECF No. 32]; Answer of Defendants
AMR Corporation and American Airlines to Complaint for Injunctive Relief Against Violation of Section 7 of the
Clayton Antitrust Act ¶¶ 6–8 [Adv. Proc. ECF No. 40]; see also First Amended Complaint ¶¶ 6–8 (stating the same).
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shares of each identified market participant. See U.S. DEP ’ T OF J USTICE AND FED. TRADE
COMM ’ N, HORIZONTAL M ERGER GUIDELINES § 5.3 (2010) (the “Horizontal Merger Guidelines”)
(summarizing the methodology to calculate HHI figures). They found more than 1,000 domestic
city-pairs where the estimated post-Merger HHI concentration levels and level increases would
be deemed “presumptively illegal” under the DOJ’s Horizontal Merger Guidelines.6 See DOJ
Complaint ¶ 38, App. A (listing more than 1,000 “presumptively illegal” city-pairs); see also
Horizontal Merger Guidelines § 5.3 (setting forth policy guidelines regarding a presumption of
enhancement of market power in highly concentrated markets). In early September 2013, the
DOJ Plaintiffs amended the DOJ Complaint to include an additional plaintiff, the state of
Michigan, as well as an updated list of 1,008 city-pairs and the corresponding HHI calculations
(the “DOJ City-Pairs”) that the DOJ deemed to be presumptively illegal under the Horizontal
Merger Guidelines. See Amended Complaint, United States, et al. v. US Airways Grp., Inc., et
al., No. 13-CV-01236 (D.D.C. Aug. 13, 2013), ECF No. 73.
Following weeks of negotiations and discussions, AMR and US Airways entered into a
settlement agreement with the DOJ in mid-November 2013 (the “DOJ Settlement”) that offered a
complete and final resolution of the DOJ Action. See Undisputed Facts ¶ 10. Later that month,
the Court approved the DOJ Settlement. See Order Pursuant to Bankruptcy Rule 9019(a)
Approving Settlement Between Debtors, US Airways, Inc., and United States Department of
Justice, et al. [Case No. 11-15463, ECF No. 11321]; Fjord v. AMR Corp. (In re AMR Corp.), 502
B.R. 23, 29 (Bankr. S.D.N.Y. 2013) (“Fjord I”). The DOJ Settlement provided for, among other
things, a divestiture of certain airport slots, gates, and related ground facilities to certain of
6 	The Horizontal Merger Guidelines do not use the phrase “presumptively illegal.” Rather, they state that
post-merger HHI concentration levels in excess of 2,500 generally result in a market classification of “highly
concentrated” and post-merger increases in HHI levels in excess of 200 are “presumed to . . . likely . . . enhance
market power.” Horizontal Merger Guidelines § 5.3.
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AAG’s competitors, including JetBlue and Southwest. See Motion of Debtors for Entry of Order
Pursuant to Bankruptcy Rule 9019(a) Approving Settlement Between Debtors, US Airways
Group, Inc., and United States Department of Justice, et al. ¶¶ 2, 16 [Case No. 11-15463, ECF
No. 10610] (the “DOJ Settlement Motion”). The DOJ Settlement also incorporated a
supplemental stipulated order under which AAG committed for a specified period of time to
maintain certain hubs and to provide daily scheduled service from its hubs to certain airports that
had such service at the time the DOJ Action commenced. See id. ¶¶ 2, 17. In late April 2014,
the U.S. District Court for the District of Columbia, where the DOJ Action was pending, entered
an order of final judgment approving the DOJ Settlement and concluding the DOJ Action. See
Final Judgment, United States, et al. v. US Airways Grp., Inc., et al., No. 13-CV-01236 (D.D.C.
April 25, 2014), ECF No. 170.
C. Plaintiffs’ Request for a Temporary Restraining Order
Prior to this Court’s approval of AMR’s entry into the DOJ Settlement—in late
November 2013—the Plaintiffs filed a motion for a temporary restraining order to block the
Merger. See Plaintiffs’ Cross-Motion for Temporary Restraining Order [Adv. Proc. ECF No. 57]
(the “TRO Motion”). The TRO Motion was filed in response to the DOJ Settlement Motion and
the Debtors’ related motion requesting that the Court permit the Merger to be consummated
without delay, notwithstanding the pendency of this adversary proceeding. See TRO Motion at
14 (describing the responsive nature of the TRO Motion); see also Motion of Debtors for Entry
of Order Regarding Consummation of Merger Pursuant to Scheduling Order [Adv. Proc. ECF
No. 47].
At the end of that month, the Court denied the Plaintiffs’ TRO Motion and granted the
DOJ Settlement Motion as well as the Debtors’ related motion seeking consummation of the
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Merger. See Fjord I, 502 B.R. at 29. With respect to the TRO Motion, the Court concluded that
the Plaintiffs failed to establish that the Merger would cause irreparable harm to each of the
Plaintiffs on an individual basis, failed to demonstrate a likelihood of success on the merits of the
Plaintiffs’ underlying antitrust claims, and failed to show that the balance of the hardships and
public interest weighed in their favor. See id. at 37–42.
D. Confirmation and the Consummation of the Merger
The Court confirmed the Debtors’ Fourth Amended Joint Chapter 11 Plan, which paved
the way for the Merger to move forward. See Findings of Fact, Conclusions of Law and Order
Pursuant to Sections 1129(a) and (b) of the Bankruptcy Code and Rule 3020 of the Federal Rules
of Bankruptcy Procedure Confirming Debtors’ Fourth Amended Joint Chapter 11 Plan [Case No.
11-15463, ECF No. 10367]. Accordingly, on December 9, 2013, AMR and US Airways
consummated the Merger which resulted in the formation of AAG. See Undisputed Facts ¶ 11.
Today, AAG is a publicly-traded airline holding company headquartered in Fort Worth, Texas
and parent company to—among others—American Airlines, Inc. (“American”), which is a
wholly-owned subsidiary. See id. ¶¶ 1–3. American continues to operate airline carriers and
provides domestic and international transportation services for passengers. See id. ¶ 4.
E. Plaintiffs’ Motions to Amend the Complaint
In January 2014, the Plaintiffs filed the first of several motions to amend their Initial
Complaint. See Plaintiffs’ Motion for Leave to File an Amended Complaint to Add Damages
Claim [Adv. Proc. ECF No. 91]. Specifically, the Plaintiffs sought to amend the Initial
Complaint to include, among other things, (1) new factual allegations; (2) a claim for treble
damages under Section 4 of the Clayton Antitrust Act, 15 U.S.C. § 15(a); (3) a demand for a jury
trial; (4) modifications to the declaratory relief sought under Section 16 of the Clayton Antitrust
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Act, 15 U.S.C. § 26; and (5) a request to require AMR and US Airways to hold their assets
separate during the pendency of the case, which was subsequently withdrawn. See id. at Ex. A.
The Court granted in part and denied in part the Plaintiffs’ first motion to amend, permitting the
inclusion of new factual allegations as well as a revision of the proposed divestiture relief, but
denying the Plaintiffs’ request for treble damages and a jury trial. See Fjord v. AMR Corp. (In re
AMR Corp.), 506 B.R. 368, 373 (Bankr. S.D.N.Y. 2014) (“Fjord II”). In accordance with the
Court’s ruling, the Plaintiffs filed the First Amended Complaint which remains the operative
complaint in this case.
Some months later, the Plaintiffs filed a second motion to amend and supplement the
First Amended Complaint, seeking to once more to include a claim for treble damages and a
demand for a jury trial. See Plaintiffs’ Motion for Leave to File a Second Amended and
Supplemental Complaint and to Add a Damages Claim and Demand for Jury Trial, Ex. A [Adv.
Proc. ECF No. 105]. The Court denied the second motion to amend without prejudice,
highlighting that the motion was “all boilerplate” and devoid of any analysis. Hr’g Tr. at 15:13,
19–20 (May 16, 2014) [Adv. Proc. ECF No. 107]; see also id. at 19:5 (emphasizing that the
motion was “just boilerplate”). In response to the Court’s ruling, the Plaintiffs filed a third
motion to amend to address the Court’s concerns. See Plaintiffs’ Amended Motion for Leave to
File Second Amended and Supplemental Complaint and to Add Damages Claim and Demand for
Jury Trial (Federal Rule of Civil Procedure 15 and Bankruptcy Rule 7015), Ex. A [Adv. Proc.
ECF No. 106]. The Court ultimately denied the third motion to amend in its entirety. See Fjord
v. AMR Corp. (In re AMR Corp.), 527 B.R. 874, 878 (Bankr. S.D.N.Y. 2015) (“Fjord III”).
Several months later, the Plaintiffs filed a fourth motion to amend and supplement the
First Amended Complaint, seeking once again to include a claim for treble damages and a
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demand for a jury trial and add claims under Sections 1 and 3 of the Sherman Antitrust Act, 15
U.S.C. §§ 1, 3. See Plaintiffs’ Motion for Leave to File a Second Amended and Supplemental
Complaint, Add a Damages Claim and Demand for Jury Trial [Adv. Proc. ECF No. 118]. At
Plaintiffs’ request, the Court withheld ruling on the Plaintiffs’ fourth motion to amend pending
the outcome of the Plaintiffs’ request to transfer and consolidate this case with the multidistrict
airline price-fixing and collusion lawsuits then-pending before the U.S. Judicial Panel on
Multidistrict Litigation (the “MDL Panel”). See Memorandum Endorsed Order, dated Oct. 27,
2015 [Adv. Proc. ECF No. 123]; see also Hr’g Tr. at 5:14–6:7 (Sept. 9, 2015) [Adv. Proc. ECF
No. 121]. The Plaintiffs’ request to transfer this action to the MDL Panel, however, was
ultimately denied. See Order Denying Transfer, In re Domestic Airline Travel Antitrust Litig.
[MDL No. 2656, ECF No. 301].
Following the MDL Panel’s denial of the Plaintiffs’ request to transfer, the Plaintiffs
notified the Court that they will no longer be “proceed[ing] with the pending motion to amend”
but rather, will now be “proceed[ing] on the basis of [the First Amended Complaint].” Joint
Letter to Chambers, dated Sept. 7, 2016 [Adv. Proc. ECF No. 202-1]. Given the Plaintiffs’ prior
efforts to seek a jury trial, the Court then inquired as to the parties’ intention regarding trial. See,
e.g., Hr’g Tr. at 15:11–12, 15:18–22, 16:1–2, 16:18–22 (Feb. 8, 2017) [Adv. Proc. ECF No.
130].7 In response, the parties filed a written notice of consent, agreeing to a bench trial before
this Court. See Notice, Consent, and Reference of a Civil Action to the Bankruptcy Court [Adv.
Proc. ECF No. 129] (the “Consent Notice”); Hr’g Tr. at 16:18–22 (Feb. 8, 2017) (stating that the
parties have agreed to a non-jury bench trial before this Court); id. at 18:9–17 (stating that the
parties will submit a written consent to trial before this Court); see also Wellness Int’l Network
7 	The Court’s inquiry was driven in part to address any concerns regarding this Court’s jurisdiction in light of
Stern v. Marshall, 564 U.S. 462 (2011).
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Ltd. v. Sharif, 135 S. Ct. 1932, 1949 (2015) (holding that Article III of the Constitution “permits
bankruptcy courts to decide Stern claims submitted to them by consent”). Specifically, the
parties explicitly stipulated that “a United States Bankruptcy Judge [will] conduct all
proceedings in this case including trial, the entry of final judgment, and all post-trial
proceedings.” Consent Notice at 1.
F. 	The Plaintiffs’ Expert Witness – Dr. Carl Lundgren
The parties completed fact discovery and expert discovery consistent with the stipulated
case scheduling order. See Interim Scheduling Order at 1 [Adv. Proc. ECF No. 128]. Notably,
the Plaintiffs submitted only one expert in support of their case, Dr. Carl Lundgren. See Expert
Report of Carl Lundgren for the Alioto Law Firm in the Matter of the Merger of American
Airlines and US Airways [Adv. Proc. ECF No. 141-1] (the “Lundgren Report”); Declaration of
Sadik Huseny in Support of Defendant American Airlines Group Inc.’s Motion for Summary
Judgment ¶ 4 [Adv. Proc. ECF No. 141]. The Plaintiffs submitted the Lundgren Report
notwithstanding their prior position that an expert opinion was not necessary as part of their
evidentiary case. See Hr’g Tr. at 80:20–22 (Feb. 13, 2014) [Adv. Proc. No. 100] (stating that
“[the Plaintiffs have] taken the position, Your Honor, that we don’t need any experts . . . the
[D]efendants do”); see also Letter and Proposed Agreed Pre-Trial Scheduling at 2 and n.2 [Adv.
Proc. ECF No. 178] (noting that the Plaintiffs’ reliance upon the Supreme Court’s prior cases,
which they argued “dictate that [the Merger] has substantially lessened competition” is “why
[P]laintiffs’ counsel initially stated [P]laintiffs would not require an expert”).
Dr. Lundgren was tasked by Plaintiffs with: (1) reviewing and updating the DOJ’s post-
Merger HHI figures for the 1,008 presumptively illegal DOJ City-Pairs, and (2) calculating the
post-Merger HHI figures for the then-most recent four quarters of data from October 1, 2015
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through September 30, 2016. See Lundgren Report at 4. As a preliminary matter, Dr. Lundgren
began his analysis with an attempt to replicate the DOJ’s HHI figures for the 1,008
presumptively illegal DOJ City-Pairs in order to “[ensure] that no grievous errors are introduced
into the HHI calculations.” Id. Dr. Lundgren noted that, although there was a strong correlation
between his HHI calculations and the DOJ’s calculations set forth in the DOJ Complaint, “most
[of his] HHI calculation[s] for the 1,008 city-pair markets showed deviations.” Id. at 5. He
attributed such deviations to the DOJ’s cursory description of its HHI calculation methodologies
and the U.S. Department of Transportation’s April 2014 revision of the 2012 DB1B dataset8 that
the DOJ used to perform its calculations. See generally id. at 5–13. Notwithstanding the
deviations, Dr. Lundgren believed that the 98% correlation between his figures and the DOJ’s
suggested “reasonable similarit[ies]” in their computations such that “[i]n terms of antitrust
implications, the conclusions that can be derived from these two sets of HHI calculations are
basically the same.” Id. at 14. Accordingly, using the same 2012 dataset, Dr. Lundgren
calculated that 985 of the 1,008 city-pairs the DOJ originally identified would have
presumptively illegal post-Merger HHI concentration levels and level increases under the
Horizontal Merger Guidelines. See id.; see also id. at 15 (stating that post-merger HHI
concentration levels in excess of 2,500 and post-merger increases in HHI levels in excess of 200,
thresholds set forth under the Horizontal Merger Guidelines, would render a merger
“presumptively illegal”).
8 	The U.S. Department of Transportation’s Origin and Destination Survey Data, more commonly referred to
as DB1B, is a “public database published by the U.S. Department of Transportation, Bureau of Transportation
Statistics” that served as the “data source for all . . . experts in this case.” Declaration of Dr. Carl Lundgren in
Support of Plaintiffs’ Cross-Motion for Summary Judgment ¶ 16 [Adv. Proc. ECF No. 149-4] (the “2017 Lundgren
Declaration”).
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Utilizing his replication methodology, Dr. Lundgren then calculated the post-Merger HHI
figures. See id. at 14–16. Dr. Lundgren found that of the 1,008 city-pairs the DOJ had initially
identified (for the period of October 2015 through September 2016) 785 of these city-pairs
would still be deemed to have presumptively illegal post-Merger HHI concentration levels and
level increases under the Horizontal Merger Guidelines. See id. at 15–16.
G. The Parties’ Cross-Motions for Summary Judgment
After the close of discovery, the Defendants sought summary judgment on the Plaintiffs’
First Amended Complaint. See Defendant American Airlines Group Inc.’s Notice of Motion for
Summary Judgment [Adv. Proc. ECF No. 139]; Memorandum of Law in Support of Defendant
American Airlines Group Inc.’s Motion for Summary Judgment [Adv. Proc. ECF No. 140]
(“Defendants’ Summary Judgment Motion”). The Defendants argued that summary judgment on
the Section 7 claim was appropriate because Plaintiffs failed to: (1) conduct a competitive effects
analysis of the Merger under the applicable legal framework; (2) establish a defined and
cognizable relevant market; (3) offer evidence of any adverse competitive effects of the Merger;
and (4) establish antitrust standing in the form of personal injury, real or threatened, from the
Merger. See Defendants’ Summary Judgment Motion at 2–3, 11–36.
The Plaintiffs cross-moved for summary judgment. See Plaintiffs’ Cross-Motion for
Summary Judgment and Opposition to Defendants’ Motion for Summary Judgment [Adv. Proc.
ECF No. 149]; Memorandum of Law in Support of Plaintiffs’ Cross-Motion for Summary
Judgment and Opposition to Defendants’ Motion for Summary Judgment [Adv. Proc. ECF No.
149-1] (“Plaintiffs’ Cross-Motion”). The Plaintiffs argued, among other things, that they had:
(1) established an irrebuttable presumption that the Merger violates Section 7 of the Clayton
Antitrust Act; (2) properly alleged two alternative geographic market definitions (while noting
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that the Defendants have already conceded that city-pairs are a relevant market); and (3)
established standing to bring this action. See Plaintiffs’ Cross-Motion at 5–12, 34–55; see also
Plaintiffs’ Declarations in Support of Cross-Motion [Adv. Proc. ECF Nos. 149-5–149-25]
(providing 20 declarations from individual Plaintiffs outlining their flight histories and future
travel plans in support of their antitrust standing). Additionally, the Plaintiffs further argued that
circumstantial evidence supported the Plaintiffs’ allegation that the severance payment to Mr.
Thomas Horton, the former Chief Executive Officer of AMR, constituted a form of commercial
bribery in violation of Section 2(c) of the Robinson-Patman Act, 15 U.S.C. § 13(c). See
Plaintiffs’ Cross-Motion at 55–60.
In support of their request for summary judgment, Plaintiffs submitted an additional
declaration from Dr. Carl Lundgren to “identify . . . city-pair markets from the list of 1,008 city-
pairs initially identified by the [DOJ] to be presumptively illegal after the [Merger] where
average airfares have increased since the [Merger].” 2017 Lundgren Declaration ¶ 2. Excluding
all HHI concentration levels and level increases, the 2017 Lundgren Declaration focused solely
on 723 city-pairs, a subset of the original 1,008 presumptively illegal city-pairs, which he argued
experienced an increase in average fares post-Merger. See id. ¶ 3. Consistent with the prior
analysis in the Lundgren Report, Dr. Lundgren examined the differences between the 2012
DB1B dataset and the fiscal year9 2016 DB1B dataset (the “FY 2016 Dataset”). See id. ¶¶ 10–
13, 15. Notably, Dr. Lundgren twice emphasized that his calculations and figures were
“presented without further analysis or conclusions based on statistical, econometric, or other
expert economic analysis.” Id. ¶¶ 3, 16.
9 	For purposes of this decision, the term “fiscal year” refers to the beginning of the fourth quarter of the prior
year through the third quarter of the current year. Accordingly, the dataset for fiscal year 2016 encompasses the four
quarters of data beginning with fourth quarter of 2015 through the third quarter of 2016 (i.e., October 1, 2015–
September 30, 2016). See 2017 Lundgren Declaration ¶ 10.
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Ultimately, the Court denied the parties’ cross-motions for summary judgment as to
Plaintiffs’ Section 7 claim as domestic airline passengers. See generally Hr’g Tr. (Aug. 29,
2018) [Adv. Proc. ECF No. 177] (the “Summary Judgment Decision”). In making its
determination, the Court construed the Defendants’ prior statements regarding city-pairs as a
judicial admission that city-pairs constituted the proper geographic market. 	See id. at 22:23–25
(construing Defendants’ “prior statement about the City Pairs market as a judicial admission”);
id. at 26:2–5 (concluding that Defendants’ “judicial admission is sufficient for the purposes of
accepting City Pairs as the proper geographic market in this case”); see also Fjord I, 502 B.R. at
40 (noting, in this Court’s prior ruling, that “the Defendants accept that city-pairs are the
properly defined market”). Utilizing a city-pairs framework as the relevant market, the Court
determined that the Plaintiffs made a sufficient showing of standing to survive a ruling on
summary judgment in their capacity as domestic airline customers. 	See Summary Judgment
Decision at 46:9–11. More specifically, the Court found that there remained “genuine disputed
issues of fact regarding the significance of [Plaintiffs’] concentration numbers, the competitive
structure of the industry overall, the import of various trends and consolidation service offers,
and the differences in competitive structure and barriers to entry among specific city pair
markets.” Id. at 70:5–11. But the Court granted Defendants’ summary judgment on Plaintiffs’
Section 7 claim to the extent it was based on Plaintiffs’ roles as travel agents and/or arising out
of an alleged national market.10 See id. at 80:1–7 (summarizing the Court’s ruling); Order
Granting in Part and Denying in Part Defendants’ Motion for Summary Judgment and Denying
Plaintiffs’ Cross-Motion for Summary Judgment [Adv. Proc. ECF No. 176].
10 	The Court also granted summary judgment to Defendants on Plaintiffs’ claim under Section 2(c) of the
Robinson-Patman Act, 15 U.S.C. § 13(c). See Summary Judgment Decision at 79:17–25; Order Granting in Part
and Denying in Part Defendants’ Motion for Summary Judgment and Denying Plaintiffs’ Cross-Motion for
Summary Judgment [Adv. Proc. ECF No. 176].
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In its Summary Judgment Decision, the Court expressed concerns regarding the minimal
breadth of evidence the Plaintiffs submitted for the Court’s consideration. See, e.g., Summary
Judgment Decision at 64:24–65:3 (“[I]n the face of the avalanche of evidence from Defendants,
Plaintiffs have responded with what I would characterize [sic] minimal evidence beyond their
original HHI data to buttress their case.”); id. at 71:21 (noting, once again, the Plaintiffs’
“minimal additional evidentiary support”). Specifically, the Court highlighted the Plaintiffs’
lack of an expert opinion that offered any sort of analytical examination of the antitrust issues
before the Court. See id. at 71:21–72:2 (noting that “Plaintiffs have not presented an expert
opinion in support of a competitive effects analysis”). Nonetheless, the Court concluded that any
determination concerning the sufficiency of the Plaintiffs’ proffered evidence would be an issue
reserved for trial. See id. 73:12–15 (“So while there are many questions about the [Plaintiffs’]
analysis of their data and their case in general, summary judgment is not the stage at which the
Court directly weighs the merits of the parties’ evidence.”); id. at 81:10–15 (stating that the
“final weighing of all the evidence in this case, whatever . . . the scope, [will] be conducted at
trail [sic]”).
H. Further Pretrial Procedure
After the Court’s ruling on summary judgment, the Plaintiffs sought to introduce an
updated and supplemental expert report by Dr. Lundgren (the “Lundgren Supplemental Report”).
See Letter and Proposed Agreed Pre-Trial Scheduling at 1–6 [Adv. Proc. ECF No. 178]. The
Plaintiffs explained that they wanted to offer a “causal effects” opinion on any anticompetitive
ramifications of the Merger based on the most current data in order to show the Merger’s impact
on the relevant markets and to address the Court’s expressed concerns regarding the lack of
competitive effects analysis in the Plaintiffs’ evidentiary case. See id. at 2–4. The Plaintiffs also
argued that admission of the Lundgren Supplemental Report was appropriate given (1) the
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developments in the airline industry since the Plaintiffs’ initial complaint was filed and (2) the
newly available DB1B data from the U.S. Department of Transportation for the period of April
1, 2017 through March 31, 2018. See id. at 1–2. After objection by the Defendants, the Court
rejected the admission of the Lundgren Supplemental Report to the extent that it sought to
include a “new opinion regarding the competitive effects of the [M]erger” and requested that the
parties attempt to reach consensus on whether incorporation of the newly available data would
constitute a permissible supplement under Rule 26 of the Federal Rules of Civil Procedure.11
Order on Plaintiffs' Request to Supplement Dr. Lundgren's Expert Report at 4–7 [Adv. Proc.
ECF No. 179] (the “Exclusion Order”); see also Order Denying Plaintiffs’ Motion for
Reconsideration [Adv. Proc. ECF No. 199] (the “Reconsideration Order”) (denying Plaintiffs’
subsequent motion seeking permission for the Plaintiffs to serve the Lundgren Supplemental
Report or, in the alternative, for the Court to reconsider its ruling set forth in the Exclusion
Order). But the Court permitted the Lundgren Supplemental Report to the extent that it updated
the data relevant to the opinions that Dr. Lundgren had already provided in the case. See
Exclusion Order at 7 (denying Plaintiffs’ request to admit the Lundgren Supplemental Report’s
new opinions concerning the competitive impact of the Merger); see also Hr’g Tr. at 29:24–30:6
(Feb. 20, 2019) [Adv. Proc. ECF No.264] (noting that when the “expert issue came up and there
was a need for some rulings . . . [it was the Court’s] understanding that there wasn’t really a
debate about [Dr.] Lundgren updating his HHI calculations . . . for purposes of the Plaintiffs’
prima facie case”).
11 	Following the Court’s rulings on the Lundgren Supplemental Report, the Plaintiffs filed a fifth motion to
amend, seeking for a fifth time to add a claim for treble damages under Section 4 of the Clayton Antitrust Act, 15
U.S.C. § 15(a) and a demand for a jury trial, which was denied. See Fjord v. AMR Corp. (In re AMR Corp.), 597
B.R. 486, 491–94 (Bankr. S.D.N.Y. 2019) (“Fjord IV”) (denying motion to amend on grounds that it was untimely,
the relief sought would be prejudicial to the Defendants, and that the Plaintiffs had acted with undue delay).
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I. 	Trial and Related Filings
The parties filed a joint pretrial order setting forth, among other things, the parties’
stipulations of undisputed facts, witness lists, the Plaintiffs’ list of relevant city-pairs, and the
parties’ list of trial exhibits. See Joint Pretrial Order at 1–2 [Adv. Proc. ECF No. 214] (the “Joint
Pretrial Order”). Subsequent to the entry of the Joint Pretrial Order, the parties filed an
additional stipulation of undisputed facts. See Plaintiffs Carolyn Fjord, et al.’s and Defendant
American Airlines Group Inc.’s Stipulation of Undisputed Facts [Adv. Proc. ECF No. 260]
(highlighting certain city-pairs flown by Plaintiffs Carolyn Fjord, Don Freeland and Gail
Kosach). In accordance with the Joint Pretrial Order, the parties filed the written direct
examinations of the witnesses testifying at trial.12 In addition to the live witnesses,13 both parties
submitted the deposition testimony of other witnesses.14
12 	For purposes of this decision, the Court shall hereinafter refer to each respective witness’ written direct
examination as “[Witness] Dir. Ex.”
The Plaintiffs filed written direct examinations for each of the following witnesses: Dr. Carl Lundgren, Jose
Brito, Don Fry, Gabe Garavarian, Valarie Jolly, Lisa McCarthy, Bill Rubinsohn, Sondra Russell, June Stansbury,
and Gary Talewsky. See Joint Pretrial Order at Ex. 3 [Adv. Proc. ECF No. 214-3]; Written Direct Examination of
Dr. Carl Lundgren [Adv. Proc. ECF No. 236] (the “Lundgren Dir. Ex.”); Written Direct Examination of Jose Brito
[Adv. Proc. ECF No. 237] (the “Brito Dir. Ex.”); Written Direct Examination of Don Fry [Adv. Proc. ECF No. 238]
(the “Fry Dir. Ex.”); Written Direct Examination of Gabe Garavarian [Adv. Proc. ECF No. 239] (the “Garavanian
Dir. Ex.”); Written Direct Examination of Valerie Jolly [Adv. Proc. ECF No. 240] (the “Jolly Dir. Ex.”); Written
Direct Examination of Lisa McCarthy [Adv. Proc. ECF No. 241] (the “McCarthy Dir. Ex.”); Written Direct
Examination of Bill Rubinsohn [Adv. Proc ECF No. 242] (the “Rubinsohn Dir. Ex.”); Written Direct Examination
of Sondra Russell [Adv. Proc. ECF No. 243] (the “Russell Dir. Ex.”); Written Direct Examination of June Stansbury
[Adv. Proc. ECF No. 244] (the “Stansbury Dir. Ex.”); Written Direct Examination of Gary Talewsky [Adv. Proc.
ECF No. 245] (the “Talewsky Dir. Ex.”).
The Defendants filed written direct examinations for each of the following witnesses provisionally under
seal: Heather Garboden, William Douglas Parker, Dennis W. Carlton, Daniel M. Kasper, and Janusz A. Ordover.
See Witness Statement of Heather Garboden [Adv. Proc. ECF No. 249-1] (the “Garboden Dir. Ex.”); Witness
Statement of William Douglas Parker [Adv. Proc. ECF No. 249-2] (the “Parker Dir. Ex.”); Witness Statement of
Dennis W. Carlton [Adv. Proc. ECF No. 249-3] (the “Carlton Dir. Ex.”); Witness Statement of Daniel M. Kasper
[Adv. Proc. ECF No. 249-4] (the “Kasper Dir. Ex.”); Witness Statement of Janusz A. Ordover [Adv. Proc. ECF No.
249-5] (the “Ordover Dir. Ex.”). At trial, the Defendants presented a corrected version of Daniel Kasper’s written
statement which the Court ultimately accepted into evidence. See Mar. 14, 2019 Trial Tr. at 973:21–975:10, 980:4–
14 [Adv. Proc. ECF No. 288]. Accordingly, for purposes of this decision, all references to “Kasper Dir. Ex.” shall
refer to the corrected version.
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Both parties also filed a number of motions in limine and related oppositions to exclude
certain evidence and arguments at trial, including evidence and argument relating to prior
litigation as well as the testimony of witness Heather Garboden.15 The Court reserved ruling on
these motions in limine until rulings became appropriate and necessary at trial. See Hr’g Tr. at
9:7–20 (Mar. 11, 2019) [Adv. Pro. ECF No. 276] (stating that, with respect to the motions in
limine, the Court will “deal with them as [they] go”). At trial, the Court denied Plaintiffs’
Motion in Limine No. 5, which sought to exclude the testimony of Heather Garboden on grounds
13 	The Plaintiffs’ witness list indicated that they intended to submit written direct testimony of non-testifying
Plaintiffs, Brenda Davis, Carolyn Fjord, Don Freeland, Gail Kosach, and Deborah Pulfer, solely with respect to the
matter of standing. See Joint Pretrial Order at Ex. 3 [Adv. Proc. ECF No. 214-3]. Ultimately, Plaintiffs and
Defendants submitted an additional statement of undisputed facts highlighting city-pairs flown by Plaintiffs Carolyn
Fjord, Don Freeland and Gail Kosach. See Hr’g Tr. at 30:10–32:24 (Mar. 6, 2019) [Adv. Proc. ECF No. 281]
(noting that Plaintiffs and Defendants would submit a stipulation reflecting their agreement on the written direct
testimony of non-testifying Plaintiffs as to standing); Plaintiffs Carolyn Fjord, et al.’s and Defendant American
Airlines Group Inc.’s Stipulation of Undisputed Facts [Adv. Proc. ECF No. 260].
14 	Plaintiffs submitted the deposition testimony of several other witnesses: Thomas Horton, Andrew Nocella,
Virasb Vahidi, Beverly Goulet, Scott Kirby and Donald Casey. See Joint Pretrial Order, Ex. 2.
The Defendants submitted the depositions of Jerald Behrens, Derek DeCross, Thomas Horton, Scott Kirby,
Michael Malaney, and Andrew Nocella. See Joint Pretrial Order at Ex. 4 [Adv. Proc. ECF No. 214-4].
15 	The Plaintiffs filed the following motions in limine: (1) Motion in Limine to Exclude Certain Evidence of
Plaintiffs’ Prior Litigation [Adv. Proc. ECF No. 223] (“Plaintiffs’ Motion in Limine No. 1”) to exclude certain
evidence relating to the Plaintiffs’ prior litigation which the Plaintiffs asserted were unrelated, irrelevant, and
prejudicial; (2) Plaintiffs’ Motion in Limine No. 2 to Exclude Deposition Testimony Designated by Defendants in
U.S. v. US Airways [Adv. Proc. ECF No. 226] (“Plaintiffs’ Motion in Limine No. 2”) to exclude certain of the
Defendants’ designations of deposition testimony in United States v. U.S. Airways Grp., Inc., et al., 1:13-CV-1236
as inadmissible hearsay; (3) Plaintiffs’ Motion in Limine No. 3 to Exclude Evidence of Efficiencies and/or to
Exclude Evidence of Efficiencies Unrelated to Any City-Pair Relevant Market [Adv. Proc. ECF No. 227]
(“Plaintiffs’ Motion in Limine No. 3”) to exclude certain evidence of “purported efficiencies” as a result of the
Merger as irrelevant; and (4) Plaintiffs’ Motion in Limine No. 5 to Exclude Testimony of Heather Garboden [Adv.
Proc. ECF No. 228] (“Plaintiffs’ Motion in Limine No. 5”) to exclude the testimony of Heather Garboden on
grounds that she was an “undisclosed expert witness.”
The Defendants filed the following motions in limine: (1) Notice of Motion and Motion in Limine to
Exclude Evidence and Argument Regarding Plaintiffs’ Other Litigations Against American Airlines [Adv. Proc.
ECF No. 210] (“Defendants’ Motion in Limine No. 1”) to exclude evidence and argument relating to the Plaintiffs’
other litigations against AAG on grounds of irrelevancy (2) Notice of Motion and Motion in Limine to Exclude
News Articles and Third-Party Report [Adv. Proc. ECF No. 211] (“Defendants’ Motion in Limine No. 2”) to
exclude news articles or third-party reports relating to air travel on grounds of inadmissibility. In support of the
Defendants’ motions in limine, the Defendants also filed the related Memorandum of Law in Support of American
Airlines’ Group Inc.’s Motions in Limine [Adv. Proc. ECF No. 212] and the Declaration of Sadik Huseny in Support
of American Airlines Group Inc.’s Motions in Limine [Adv. Proc. ECF No. 213].
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that she was an “undisclosed expert witness,” permitting her to testify solely as to facts stemming
from her capacity as an employee. See Hr’g Tr. at 674:5–675:17 (Mar. 12, 2019) [Adv. Pro.
ECF No. 277] (ruling that Heather Garboden’s testimony will be “appropriate to the extent it
talks about . . . facts well within the scope of her employment”). As for the remaining motions in
limine, the Court now denies each as moot.16
II. 	THE PRE-MERGER AIRLINE INDUSTRY
A. Deregulation and the Structural Dynamics of the Airline Industry
The Airline Deregulation Act of 1978 signaled a radical shift in the federal government’s
stance on the level of regulation and restraint to be imposed on competition in the airline
industry. As a result of the United States Civil Aeronautics Board’s (“CAB”) stringent
regulations on airfares, airline routes, and new entry into the industry, the airline industry before
1978 was generally characterized by high costs, inflated prices set by the CAB, and limited
16 	With respect to Plaintiffs’ Motion in Limine No. 1 and Defendants’ Motion in Limine No. 1 concerning the
exclusion of evidence relating to Plaintiffs’ prior litigation and other litigation proceedings against American,
respectively, the Court denies these motions as moot since neither party attempted to introduce such evidence at
trial. See Defendant American Airlines Group Inc.’s Proposed Findings of Fact and Conclusions of Law [Adv. Proc.
ECF No. 272] (“Defendants’ Proposed FOF/COL”) at 11 n.3 (noting that parties did not introduce evidence of
Plaintiffs’ prior or other litigations against American). Similarly, with respect to Defendants’ Motion in Limine No.
2, which sought the exclusion of news articles and third-party reports, the Court denies the motion as moot.
Plaintiffs did not submit into evidence any of the specified news articles and third-party reports nor does the Court
rely on any of the foregoing in reaching its decision. See Defendant American Airlines Group Inc.’s Memorandum
of Law in Support of its Motions in Limine [Adv. Pro. ECF No. 212] (seeking the exclusion of exhibit numbers PX-
050, PX-082, PX-087, PX-089, PX-092, PX-106, PX-112 and PX-115). The Court notes, however, that Plaintiffs
submitted exhibit PX-02 into evidence during the examination of witness Douglas Parker, which is comprised of an
email chain discussing a published news article regarding the merger between United and Continental airlines and
their decision to keep Cleveland as a hub. See Hr’g Tr. at 479:8–14, 481:14–482:20 (Mar. 12, 2019) (questioning
Parker concerning his statements surrounding the article). As Defendants did not object to its admission at trial, that
exhibit was admitted. Id. at 481:14–19.
Moreover, the Court denies Plaintiffs’ Motion in Limine No. 2 concerning the exclusion of certain
deposition testimony in the DOJ Proceeding as moot as the Court does not rely on such testimony to reach its ruling
as discussed below. In a similar vein, the Court also denies Plaintiffs’ Motion in Limine No. 3 which seeks to bar
testimony from certain of Defendants’ witnesses focusing on the purported efficiencies stemming from the Merger
that are untethered to a specific city-pair market. The Court does not rely on Defendants’ submitted evidence
concerning efficiencies as the basis for a classic efficiencies defense, but rather considers the submitted evidence as
factual context. See also infra Discussion, Section II.D.iii (addressing consideration of evidence of the Merger’s
efficiencies).
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point-to-point networks unable to support frequent flights between cities. See Kasper Dir. Ex. ¶¶
13, 15; see also AMR I, 477 B.R. at 396 (offering a brief summary on the domestic deregulation
of the airline industry). Facing minimal direct competition and an inability to reduce prices to
capture lower costs, airlines were effectively disincentivized at the time from partaking in cost-
efficient and profit-maximizing behaviors. See Kasper Dir. Ex. ¶ 14; see also AMR I, 477 B.R.
at 396 (discussing the impact of CAB regulations on airline decision-making).
The enactment of the Airline Deregulation Act of 1978 was transformative, introducing
competitive market forces in the airline industry and paving the way for the development of the
hub-and-spoke “legacy” network carriers as well as the entry and expansion of “point-to-point”
low-cost carriers (“LCCs”) and later, ultra-low-cost carriers (the “ULCCs”). 	See Kasper Dir.
Ex. ¶¶ 8, 16; id. ¶¶ 18, 21–25 (discussing, among other things, the “LCC revolution” and the
rapid expansion of LCCs beginning in the 1980s); Garboden Dir. Ex. ¶¶ 7–8; see also AMR I,
477 B.R. at 396 (noting the emergence of LCCs as a consequence of deregulation). Network
carriers—generally understood to include American, Delta Airlines, and United Airlines—
operate on a “hub-and-spoke” model, a system of interconnecting flights or “spokes” originating
at a “hub,” a centralized point in a route network through which flights are routed. See Kasper
Dir. Ex. ¶¶ 16, 17; Garboden Dir. Ex. ¶ 9. Such a structure enables network carriers to provide
an “anywhere to everywhere” service, allowing them to offer routes to smaller cities or regions
that would not otherwise be economical to serve and increasing the number of options available
for consumers. See Parker Dir. Ex. ¶ 6; Kasper Dir. Ex. ¶ 17; Garboden Dir. Ex. ¶ 9.
In contrast, LCCs—such as Southwest Airlines—operate on a lower cost point-to-point
basis, flying direct between two locations, predominantly on lucrative routes that contain
sufficient local air travel demand to sustain operations. See Garboden Dir. Ex. ¶¶ 8, 11; Parker
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Dir. Ex. ¶ 8. The cost savings from the point-to-point structure are then transferred to consumers
in the form of lower airfares, giving LCCs a competitive edge over higher cost carriers and
allowing them to gain market share. See Garboden Dir. Ex. ¶ 8; Kasper Dir. Ex. ¶ 19. LCCs
also generally maintain lower labor and aircraft costs. See Kasper Dir. Ex. ¶ 19.
Since deregulation, LCCs have grown rapidly, accelerating their expansion in the 1990s
and extending their geographic scope. See Kasper Dir. Ex. ¶ 23. By the end of 2000, LCCs
offered substantial service in the West, the South, and the Great Lakes regions, as well as the
beginnings of service in the East. See Kasper Dir. Ex. ¶ 25. By the early 2000s, LCC influence
arguably reached a “tipping point,” ushering in a new era where LCCs were considered a
formidable competitive force in the airline industry and their appeal extended to both leisure and
business passengers alike. See id. ¶¶ 29, 39–40; Ordover Dir. Ex. ¶ 22 (stating that LCCs
“effectively constrain industry pricing”). As of 2018, more than 75% of domestic air travelers
nationwide had access to LCC options. See Kasper Dir. Ex. ¶ 31; see also Parker Dir. Ex. ¶ 8
(estimating that nearly 80% of American passengers are traveling on routes served by one or
more LCC or ULCC). The impact of LCCs on the airline industry had become so remarkable
that the United States Department of Transportation coined the term the “Southwest Effect” to
denote the influence of Southwest and other LCCs on air travel demand and corresponding
prices. See Kasper Dir. Ex. ¶ 24; id. ¶ 36–38 (summarizing the results of several studies which
examined the relationship between LCC expansion and decline in airfares); see also AMR I, 477
B.R. at 396 (describing the “Southwest Effect” and its impact on the airline industry); Hr’g Tr. at
110:21–25 (Mar. 11, 2019) (Bill Rubinsohn, a named Plaintiff, testifying that “airfares were
significantly less” because US Airways had to match Southwest’s prices).
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B. External Shocks to the Airline Industry
The first decade of the 2000s was a precarious period for the now deregulated airline
industry as it was marred by a series of external shocks and macroeconomic events that resulted
in severe reductions in demand and surges in costs. See Garboden Dir. Ex. ¶ 10; Parker Dir. Ex.
¶ 9; Kasper Dir. Ex. ¶ 27. The collapse of the internet bubble, the 9/11 terrorist attacks, the
subsequent Great Recession of 2008-2009, coupled with unprecedented spikes in oil prices from
2003-2008, all contributed to a period of substantial upheaval and a period of significant losses
in revenue. See Garboden Dir. Ex. ¶ 10; Parker Dir. Ex. ¶¶ 9–10. The flexibility of network
carriers to quickly respond to these sharp dips in demand was limited by the high fixed costs of
maintaining hubs. See Parker Dir. Ex. ¶ 10 (noting that the hub-and-spoke structure requires
airlines to be committed to a scale of operations that, in difficult times, could greatly exceed
demand). By contrast, LCCs during this time continued to expand and increase profits despite
these outside events. See Kasper Dir. Ex. ¶¶ 27, 73; Parker Dir. Ex. ¶ 10; see also Kasper Dir.
Ex. ¶ 9 (noting that capacity reductions by legacy carriers from 2001-2009 were largely offset by
increases in LCC capacity and load factors).
C. Mergers and Restructurings of Other Airline Carriers
Facing billions of dollars in lost revenue because of these macroeconomic shocks and the
increasing competition from LCCs, numerous legacy carriers—US Airways, Northwest Airlines,
Delta Airlines, United Airlines, and American—filed for bankruptcy between 2003 and 2012.
See Garboden Dir. Ex. ¶¶ 5, 10; Parker Dir. Ex. ¶¶ 4, 10; Kasper Dir. Ex. ¶ 74. While Chapter
11 restructurings helped reduce carrier costs and mitigate the effects of these outside events, the
bankruptcy restructurings alone were insufficient to fully restore the legacy carriers to
profitability. See Kasper Dir. Ex. ¶ 74. Specifically, legacy carriers remained unable to raise
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post-9/11 load factors above break-even levels—there were insufficient passengers to cover the
airlines’ cost—resulting in massive losses and underutilized capacity. See id. ¶¶ 75–76.
Consequently, network carriers sought out mergers to weather the new competitive environment
and achieve long-term sustainability. See Garboden Dir. Ex. ¶ 12; Parker Dir. Ex. ¶ 11. The
mergers enabled network airlines to capture “efficiencies and network synergies” that could not
otherwise be realized. Parker Dir. Ex. ¶ 4; see Kasper Dir. Ex. ¶ 84 (stating that the “success of
large network carriers today hinges in significant part on the scope of their networks”). This is
because, generally speaking, the utility and value of a network carrier is directly related to the
size of its network; expansion of an airline’s network leads to an increase in the number of
possible routes and allows an airline to capture a larger portion of the passenger market. See
Parker Dir. Ex. ¶ 4; Kasper Dir. Ex. ¶¶ 79–80.
Not surprisingly then, the mergers between Delta and Northwest Airlines in 2008 and
United and Continental Airlines in 2010 resulted in integrated national networks that improved
the competitiveness of these merged legacy carriers, while at the same time reducing their costs.
See Garboden Dir. Ex. ¶¶ 5, 12; Kasper Dir. Ex. ¶¶ 10, 84 & Dem. 10. The newly merged
entities of Delta and United increased their market share and passenger traffic, particularly from
“high-yield” business travelers, and ultimately expanded their networks without incurring the
enormous risk and capital costs normally associated with organic growth and the opening of new
hubs. See Parker Dir. Ex. ¶¶ 4, 7, 11, 14. The newly formed national networks of the merged
legacy carriers have led to an increase in overall legacy carrier capacity over the last several
years. See Kasper Dir. Ex. ¶ 77.
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D. Competitiveness of American and US Airways
Following the mergers of Delta and United, American and US Airways faced structural
network disadvantages relative to their newly merged competitors as both American and US
Airways maintained limited networks only concentrated in certain segments of the country. See
Garboden Dir. Ex. ¶¶ 5, 12–13; Parker Dir. Ex. ¶¶ 4, 13–14, 23–24; Kasper Dir. Ex. ¶¶ 84–86.
Prior to the Merger, US Airways’ presence was predominantly in the East Coast with hubs in
Charlotte, Philadelphia, Phoenix and Washington, whereas American was strongest in the
Midwest. See Garboden Dir. Ex. ¶ 13; Parker Dir. Ex. ¶¶ 4, 12. American also only maintained
a minimal market presence between its Miami hub and New York, which limited its ability to
offer service to passengers seeking to travel up and down the East Coast. See Parker Dir. Ex. ¶
23; Hr’g Tr. at 538:7–17 (Mar. 12, 2019) (stating that American passengers flying from the
Northeast to the Southeast would have to fly through Dallas or Chicago to reach their destination
as there was “no other alternative”). Further threatening US Airways’ long-term sustainability
and competitiveness was its diminishing labor cost advantage due to the expiration of certain of
its labor agreements. See Parker Dir. Ex. ¶ 13.
Despite the limited scope of their individual networks, however, American and US
Airways’ networks were, together, perfectly complementary—each airline maintained its
strongest presence in a differing region of the country, and the two had minimal overlap. See
Garboden Dir. Ex. ¶ 13; Parker Dir. Ex. ¶ 26 (noting that United and American codenamed the
Merger “Project Tetris” to reflect the complementary nature of their networks). In light of this,
American and US Airways believed that a merger would be an ideal resolution to address their
structural disadvantages, enabling the airlines to create an integrated, national network and to
realize considerable synergies for the benefit of consumers. See Garboden Dir. Ex. ¶¶ 5, 14–17;
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Parker Dir. Ex. ¶¶ 27–28, 30–31; see also Kasper Dir. Ex. ¶ 88 (stating that “[c]ombining their
networks was the only practical way for American and US Airways to attain the network scope
and resulting competitive benefits . . . enjoyed by their competitors”).
III. 	THE PREDICTED BENEFITS OF THE PROPOSED MERGER ON THE
AIRLINE INDUSTRY
A. Strengthened Competitive Position for American and US Airways
The success of the legacy carrier business model is generally predicated upon a carrier’s
ability to provide passengers with an “anywhere-to-everywhere” service and offering a wide
range of products. See Kasper Dir. Ex. ¶¶ 79, 80; see also id. ¶ 84 (stating that the “success of
large network carriers . . . hinges in significant part on the scope of their networks”).
Accordingly, the melding of American and US Airways’ complementary networks was
anticipated to strengthen American and US Airways’ competitive positions as well as provide
several additional benefits, including significant growth and connectivity opportunities that
would be otherwise unattainable absent a merger. See Garboden Dir. Ex. ¶ 15; Parker Dir. Ex.
¶¶ 4, 14–15; see also id. ¶ 21 (stating that the “core” of US Airways’ “advocacy for the Merger”
was “competitive strategy” through the resolution of the “network disadvantage that both
American and US Airways faced”). It was thought that a more comprehensive network resulting
in expanded service and coverage would enable American and US Airways to better compete
with other legacy carriers as well as LCCs, ULCCs and regional airlines, particularly for
corporate consumers who generally favor carriers with larger and more ubiquitous networks. See
Garboden Dir. Ex. ¶¶ 5, 15; Parker Dir. Ex. ¶¶ 17, 21, 31, 43; Kasper Dir. Ex. ¶ 86; see also
Parker Dir. Ex. ¶ 38 (noting the Merger would result in the addition to the carriers’ network of
130 cities served by American and not US Airways and 62 cities served by US Airways but not
American).
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Furthermore, due to the complementary nature of American and US Airways’ networks,
the Merger was also expected to allow American and US Airways to maintain the same levels of
“available seat miles” (“ASM”)17 post-Merger without a reduction in either airline’s fleet or
employees. See Parker Dir. Ex. ¶ 29; see also Garboden Dir. Ex. ¶ 16 (highlighting that the
Merger was a “significant opportunity for fleet optimization”). Both airlines believed that the
Merger was the “best possible outcome” and a “better way to achieve all the benefits of a more
competitive network, including real, sustainable capacity expansion.” Parker Dir. Ex. ¶¶ 31, 35.
B. Pro-Competitive Benefits for Consumers
In addition to the improved competitive posture of American and US Airways, the
Defendants believed that the Merger would provide significant value and benefits to consumers.
See, e.g., id. ¶ 30 (stating that the “most significant consumer benefit” of the Merger was that
consumers would have a “one-stop shop” for their travel needs); Carlton Dir. Ex. ¶ 26
(concluding in his 2013 prospective study that the post-Merger consumer benefits were “driven
by network quality improvements that flowed directly from the [then-proposed Merger]”). On
whole, American and US Airways estimated that the Merger would generate over $1 billion per
year in total cost, network and other synergies stemming primarily from consumer value derived
from the merged airlines’ expanded network. See Parker Dir. Ex. ¶ 30; see also Garboden Dir.
Ex. ¶ 14 (stating that the post-Merger synergies were “expected to be significant”). American
and US Airways believed that the combination of their complementary networks would increase
the number of direct and non-stop routes between cities, the number of city-pair options via a
connecting route as well as the number of travel itineraries for each city-pair within the network.
17 	“Available Seat Miles,” a metric commonly used in the airline industry, serves as the “standard unit of
measure for passenger carrying capacity” and represents one seat flying one mile. Garboden Dir. Ex. ¶ 25; see also
Carlton Dir. Ex. ¶ 21 (stating that ASMs are a “standard measure of airline capacity”).
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See Garboden Dir. Ex. ¶ 5; Carlton Dir. Ex. ¶ 26; see also Garboden Dir. Ex. ¶ 17 (noting that
the “entire thrust behind the Merger was to create a . . . network carrier that would expand
offerings and choices for consumers”) (emphasis in original); Parker Dir. Ex. ¶ 28 (American
estimated that the combination of airlines would create about 1,300 new connecting
opportunities that would not exist outside of the Merger). They also anticipated new
connectivity opportunities and increased accessibility for consumers in small and medium-sized
cities to American and US Airways’ hubs. See Parker Dir. Ex. ¶ 30. Specifically, the Merger
would result in the connection of passengers through five East Coast hubs and consequently
create new routes that would link smaller cities in the Midwest and East Coast. See id. ¶ 27.
The Merger was further projected to create the largest frequent flyer program of any U.S.
carrier that would yield additional miles and increased opportunities for consumers to apply such
miles to a greater variety of itineraries. See Garboden Dir. Ex. ¶ 16; Parker Dir. Ex. ¶ 30; see
also id. ¶ 39 (noting that American and US Airways anticipated that the combined airline would
have 101 million frequent flyer program members, larger than either United or Delta’s
programs). Additionally, American and US Airways believed that the Merger would lead to
additional improvements, including the strengthening of the oneworld Alliance program, a global
alliance of major airlines, and the enhancement of operations and services. See Garboden Dir.
Ex. ¶ 16 (citing the expected enhancement of customer-valued services, including on-time
performance, baggage handling and other customer amenities).
C. Anticipated Impact on Competition in the Airline Industry Generally
American and US Airways believed that the Merger would not lead to anticompetitive
effects on the airline industry. See, e.g., Carlton Dir. Ex. ¶ 7 (concluding in his 2013 prospective
analysis of the impact of the Merger that the Merger would likely expand American’s output by
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an estimated 2.9 million passengers and produce other net consumer benefits estimated to be at
least $750 million per year); id. ¶ 33 (stating that, not even considering the DOJ Settlement in his
2013 prospective study, “consumer benefits from the [then-proposed Merger] would exceed
many times over any plausible adverse fare effects . . . yielding large net consumer benefits”). In
fact, they believed the Merger would allow for the existence of a third national network carrier,
one that likely would not have existed otherwise. See Parker Dir. Ex. ¶ 31 (stating that, absent
the Merger, American and US Airways would have continued to lose market share to the other
legacy carriers such that there “could very well” be just two national network carriers). As
Defendants’ witnesses testified, the complementary nature of American and US Airways’
networks—coupled with LCC competition—reduced concerns of an increase of airfares or
reduction of competition post-Merger. See id. ¶ 32; Carlton Dir. Ex. ¶ 7 (finding in his 2013
prospective study that LCCs were the “truly disruptive force,” putting downward pressure on
prices). Indeed, American and US Airways directly competed with respect to nonstop service on
only 12 routes out of nearly 700 non-stop routes. See Parker Dir. Ex. ¶ 32. 	Overall capacity for
the combined airlines was also not expected to decrease. See id. ¶ 29 (stating that ASM of the
combined carriers was anticipated to remain at the same levels).
IV. 	THE POST-MERGER EFFECTS ON THE AIRLINE INDUSTRY18
A. Expansion of Capacity and Impact on Prices
Five years following the Merger, the newly combined American has expanded its overall
capacity, including an increase in the number of flight offerings and travel options for
18 	The following discussion concerning the impact of the Merger on the airline industry is accurate with
respect to the periods of time discussed at trial, all of which occurred prior to the outbreak of the COVID-19
pandemic. Since the start of the pandemic, the global economy has faced substantial difficulties and the airline
industry specifically has suffered a dramatic and sustained drop in air travel demand. See Alison Sider, Airlines
Plan for Prolonged Coronavirus Drought, W ALL S T. J., (Oct. 16, 2020), https://www.wsj.com/articles/airlines-plan-
for-prolonged-coronavirus-travel-drought-11602848431 (discussing how passenger volume was more than 60%
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consumers. See Garboden Dir. Ex. ¶ 21–22 (stating that, since 2013, post-Merger American has
increased its offering of non-stop routes by 14.5%, unique city-pairs by 19% and unique
itineraries across the American network by 17%); id. ¶ 26 (stating that, from 2013–2018, post-
Merger American has had an increase of 4.5% in total seats, a 4.6% increase in total passengers
flown and an 8.5% increase in total ASMs); Parker Dir. Ex. ¶ 45 (post-Merger American has
added over 3,000 connecting opportunities, including service to regions where neither American
or US Airways have flown before the Merger). The upward trend in post-Merger American’s
capacity parallels that of the airline industry, which has also experienced considerable growth on
whole since 2013. See Garboden Dir. Ex. ¶ 28. Notably, the number of regional network and
flight options for small and mid-sized communities have increased since the Merger, including
the number of direct flight options from the combined airline’s now nine hubs, resulting in more
efficient and less circuitous travel paths for travelers from such communities. See id. ¶¶ 32–36
(noting, among other things, that post-Merger American has seen an increase of 18.9% in
domestic regional ASMs and a 10.3% increase in domestic regional seats); Parker Dir. Ex. ¶ 46
(stating that the new American can serve omni-directional travel needs from most of its hubs).
In fact, the post-Merger American now offers service in 17 domestic cities that were not
previously served by either American or US Airways prior to the Merger. See Garboden Dir. Ex.
¶ 35.
The most recent Department of Transportation quarterly airfare report offered at trial
showed that real average domestic airfares have in fact decreased by 4.5% during the second
quarter of 2018 in comparison to the second quarter of 2017, the lowest level for a second
quarter since the government began recording prices in 1995. See Kasper Dir. Ex. ¶ 34. Along a
lower than what it was the year prior and that “U.S. airlines expect that it will be years before their business recovers
from the coronavirus pandemic”). The status of the airline industry in the COVID-19 era is not before this Court.
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similar vein, a retrospective econometric19 study in 2016 on the impact of the Merger further
suggests that the Merger did not increase prices. See Carlton Dir. Ex. ¶ 7. Specifically, this
2016 retrospective study concluded that the Merger reduced the post-Merger American’s average
fares by approximately 12.3%, increased the volume of passengers by 20.2%, and increased the
number of seats by approximately 19.6%. See id. ¶ 43. As one of Defendants’ experts
explained, any anticompetitive effect on prices would likely have been observed on overlapping
routes where American and US Airways were directly competing prior to the Merger. See id. ¶
37 (noting that overlapping routes would be “where one would expect a merger’s anticompetitive
effects to be concentrated”). But notably, the 2016 retrospective study concluded there was “no
evidence of anticompetitive effects for connecting overlaps relative to non-overlap connecting
routes” following the Merger. Id. ¶ 42.
An examination of trends in the post-Merger American and the industry’s overall “total
revenue per available per seat mile” (“TRASM”)20 further confirms the 2016 retrospective
study’s conclusions as to the Merger’s impact on price. See Garboden Dir. Ex. ¶¶ 40–41.
TRASM is a metric which accounts for the base fare of a ticket as well as other fees paid (e.g.,
baggage fees). See id. ¶ 40. The post-Merger American’s marginal increase of 1.6% in TRASM
levels from 2013 to 2018 was outpaced by the rate of inflation in the amount of 7.8% during the
same timeframe. See id. ¶ 41. Similarly, the overall airline industry’s TRASM decreased 1.3%
from 2013 to 2018, indicating that the overall TRASM for both the post-Merger American and
the industry on whole, when adjusted for inflation, has declined since the Merger. See id. The
19 	Econometric analysis is the application of statistical techniques and methodologies to economic data while
controlling for additional factors. See Hr’g Tr. at 1261:21–1262:21 (Mar. 15, 2019) [Adv. Proc. ECF No. 280] (Dr.
Carlton defining econometrics generally).
20 	“Total Revenue Per Available Seat Mile” is generally calculated by dividing the total operating revenue by
ASMs and represents the amount of revenue per every seat-mile flown. See Garboden Dir. Ex. ¶ 40.
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fluctuations in TRASM for both American and other network airlines during 2013 through 2018
appear to track the changes in fuel prices, one of the primary determinants of airline costs. See
id. ¶ 42. Finally, a comparison of TRASM for the airline industry in general against overall
changes in ASMs and seats for the period of 2013 to 2018 reflects a steady increase in capacity
relative to generally stagnant revenue for the industry on whole. See id. ¶ 43.
B. Improvements in Infrastructure and Fleet Utilization
The Merger has also enabled American to expand service from its nine hubs in Charlotte,
Chicago, Dallas, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C.
and permitted American to invest heavily in improving its infrastructure. See Garboden Dir. Ex.
¶¶ 28–31. Since December 2013, there has been a 5% increase in total annual seats on the post-
Merger American from its 9 hubs in conjunction with an overall increase of 12% across all
carriers servicing those hubs as of 2018. See id. ¶ 29. American has also invested significant
capital into facility and infrastructure improvements at certain of its hubs. See id. ¶ 30 (stating
that, among other things, the combined airline has already invested more than $2 billion at its
Dallas hub, $200 million at its Philadelphia hub, $100 million at its Charlotte hub and $18
million at its Washington D.C. hub).
The Merger has also enabled American and US Airways to better optimize the use of
their combined fleet and more efficiently allocate aircraft throughout their network to routes
where such aircraft would be better suited. See id. ¶ 38 (stating that the post-Merger American
has since reallocated several Boeing 767 wide-body aircrafts and has replaced regional jets on
high-demand routes with larger airplanes). The more efficient allocation of aircraft has led to an
increase in consumer options and overall offerings from the combined airline. See id. Since the
Merger, American also has purchased several new mainline and regional aircraft to replace older
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and less efficient airplanes, resulting in the largest and youngest fleet of any U.S. network
carrier. See id. ¶ 37.
C. Continued Growth and Impact of Low-Cost Carriers
The competitive influence of LCC and ULCC carriers has continued after the Merger,
with such carriers continuing to expand and grow. See Parker Dir. Ex. ¶ 53. LCCs and ULCCs
currently comprise nearly 40% of the combined market for domestic air travel and maintain a
customer base that includes both leisure and business passengers. See id.; Kasper Dir. Ex. ¶¶
39–40. LCC and ULCC options are now available to nearly 80% of passengers who fly on
American, including at every one of the combined airline’s nine hub cities. See Parker Dir. Ex. ¶
53; see also Kasper Dir. Ex. ¶ 31 (noting that, as of 2018, over 75% of domestic air travelers
industry-wide now have access to LCCs in most states across the country). In fact, LCCs now
compete with non-stop service on 5 of the 12 previously overlapping routes that American and
US Airways directly competed on prior to the Merger. See Parker Dir. Ex. ¶ 53. Considering
their historical growth pattern and considerable low operation costs, it is anticipated that LCCs
and ULCCs will continue to expand and increase market share. See Kasper Dir. Ex. ¶¶ 43–44;
see also id. ¶ 46 (explaining that a significant portion of future LCC growth is likely to come
from ULCCs).
Moreover, the “Southwest Effect” remains in force, as the evidence suggests that the
presence of an LCC on a route continues to place downward pressure on prices. See Kasper Dir.
Ex. ¶¶ 37–38. In an analysis performed in 2015, for example, the DOJ found that on routes at
Newark Liberty International Airport that Southwest entered in 2010, average airfares year-over-
year declined between 5% and 27%. See id. ¶ 38 (citing Verified Complaint at 9–10, U.S. v.
United Cont’l Holdings Inc., et al., No. 2:15-CV-07992-WHW-CLW (D.N.J. Nov. 10, 2015));
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see also id. (noting that certain research has found that even the threat of Southwest’s entry on a
route can cause network carriers to reduce their fares). The Department of Transportation has
generally recognized that on routes where LCCs are present, legacy carriers are “usually forced
to adopt a pricing and yield management posture similar to that of their low-cost carrier
competition.” See Kasper Dir. Ex. ¶ 38 (quoting U.S. DEP ’ T OF TRANSP ., OFFICE OF A VIATION
AND I NT ’ L AFFAIRS , AVIATION ANALYSIS , FARE RESTRUCTURING IN CINCINNATI – SECOND
QUARTER 2005, 6 (2006)).
The extent of LCC influence is also reflected in the network airlines’ response to
“unbundling” and the offering of low-cost, connecting service. See, e.g., Parker Dir. Ex. ¶ 55
(noting that American’s reinstatement of low-cost, connecting service was in response to
Southwest’s pricing approach). In response to the proliferation of ULCCs—ultra low-cost
airlines whose business model is predicated upon the “unbundling” of charges for services
previously “bundled” together at a single price—legacy carriers have since introduced “basic”
economy fares. See Kasper Dir. Ex. ¶¶ 41–42. Such “basic” fares offer discounted pricing but
include restrictions such as the inability to fly standby and limits on the ability to select a seat
prior to check-in. See id. ¶ 42. Similarly, American restarted its Advantage Fares program after
the Merger in response to Southwest’s offering of a similar service at Advantage Fare prices.
See Parker Dir. Ex. ¶ 55 (stating that Delta and United reinstated their discounted connecting
fare programs as well). The Advantage Fares program, originally offered by US Airways,
provided discounted and lower fares on connecting routes in order to induce consumers to select
a connecting service as opposed to a non-stop alternative with a competing airline. See id. ¶ 54.
Finally, as further incentive to price-sensitive consumers, American has at times undercut its
own prices, offering lower-priced one-step fares on routes where it also offers non-stop service
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to capture consumers who are willing to trade convenience for low prices and will purchase
tickets when they would otherwise not fly at all. See id. ¶ 55.
V. 	THE PLAINTIFFS’ CASE
The Plaintiffs’ case-in-chief relies heavily on two sources of evidence: (1) testimony
from some named Plaintiffs about their individual experiences with airline travel and (2) the
expert opinion of Dr. Carl Lundgren. During the course of trial, the Plaintiffs called nine of the
named Plaintiffs for live testimony in support of their case: Bill Rubinsohn, Sondra Russell,
Donald Fry, Lisa McCarthy, Gabriel Garavanian, Jose Brito, Valarie Jolly, Gary Talewsky, and
June Stansbury (collectively, the “Named Plaintiffs”). Plaintiffs also presented their expert
witness, Dr. Carl Lundgren live at trial. For the sake of efficiency, the Plaintiffs presented the
direct testimony of their live witnesses in written format (collectively, the “Named Plaintiffs’
Written Testimony”). See Joint Pretrial Order at 2. At trial, Plaintiffs also called as an adverse
witness William Douglas Parker, the Chairman and Chief Executive Officer of AAG.
A. Plaintiffs’ Lay Witness Testimony
The Named Plaintiffs are nine travel agency owners and/or travel agents who have
collectively flown on hundreds of domestic and international flights with various airlines pre-
and post-Merger, including American and US Airways. See Brito Dir. Ex. ¶¶ 1, 5–6 (travel
agency owner who has flown on 156 domestic and international flights, including 31 American
or US Airways flights); Fry Dir. Ex. ¶¶ 2–3, 4–6 (travel agency owner and travel agent who flew
on 51 flights between 2009 and 2017, including 9 pre-Merger American or US Airways flights,
as well as a handful of American flights since 2017); Garavanian Dir. Ex. ¶¶ 4, 5–6 (travel
agency part-owner and travel agent who has flown “numerous times” on American and US
Airways); Jolly Dir. Ex. ¶¶ 2, 5–7, 22 (travel agency owner who has flown 44 pre-Merger
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American flights and 52 post-Merger American flights since 2009); McCarthy Dir. Ex. ¶¶ 3–4,
9–14 (travel agency owner and travel agent who has flown on 238 flights since 2009, including
18 American or US Airways post-Merger flights); Rubinsohn Dir. Ex. ¶¶ 1, 5–7 (travel agency
owner who, between 2008 and 2017, has flown on 310 domestic and international flights,
including 145 pre-Merger American or US Airways flights and 175 post-Merger American
flights); Russell Dir. Ex. ¶¶ 3, 6, 8–10 (travel agency owner and travel agent who, between 2009
and 2017, has flown on 110 domestic and international flights, including 52 pre-Merger
American flights and 58 post-Merger American flights); Stansbury Dir. Ex. ¶¶ 3, 9–16 (travel
agency owner and travel agent who has flown on 94 domestic and international flights since
2009, including 18 pre-Merger American or US Airways flights and 76 post-Merger American or
US Airways flights); Talewsky Dir. Ex. ¶¶ 4, 10–18 (travel agency owner and travel agent who
has flown 215 domestic and international flights since 2009, including 56 pre-Merger American
flights and 32 post-Merger American flights).
The Named Plaintiffs allege a litany of harms purportedly suffered from the Merger,
ranging from economic harms to the overall deterioration in the quality of the flying experience.
The alleged economic harms include increases in airfares and ancillary fees, as well as the
imposition of fees for services that were previously complimentary such as checked baggage, in-
flight meals, lounge access and seat assignments. See, e.g., Brito Dir. Ex. ¶ 7 (alleging, among
other things, increased airfares, the imposition of baggage fees, charges for inflight meals and
lounge access and “outrageous” fuel surcharges); Garavanian Dir. Ex. ¶¶ 9–12 (discussing the
increases in airfares for flights in and out of Manchester, NH resulting from a decrease in flight
availability); Jolly Dir. Ex. ¶¶ 9, 12, 16 (discussing, among other things, the increase in baggage
and change fees, as well as higher airfares); Fry Dir. Ex. ¶¶ 7, 8 (stating that “in [his] experience,
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air travel has continued to degrade, particularly since the [M]erger of American Airlines and US
Airlines”); Hr’g Tr. at 81:21–82:2, 84:23–85:8, 85:23–86:15 (Mar. 11, 2019) (Rubinsohn
testifying as to the increase in airfares and baggage fees, the lack of food service and the
imposition of change fees); id. at 147:16–24 (Russell testifying as to the imposition of baggage
fees and the increase in change fees); id. at 224:10–22, 229:4–17 (McCarthy testifying as to the
increase in airfares); Hr’g Tr. at 707:18–22, 708:8–11, 708:16–709:17, 713:20–714:13, 720:2–14
(Mar. 13, 2019) [Adv. Proc. ECF No. 278] (Talewsky testifying as to the increase in airfares and
fees for lounge access, the imposition of fees for seat assignments, baggage and change fees).
The Named Plaintiffs also testified as to the negative impact of the Merger on their
ability to operate their travel agencies, including a reduction in demand and loss of business.
See, e.g., Jolly Dir. Ex. ¶ 18 (testifying that it has become “difficult and time consuming to offer
good service” at her travel agency and that she has lost clients when they “blame [her] for
overbooked flights or when airlines take away pre-reserved and paid for seats”); McCarthy Dir.
Ex. ¶ 25 (stating that the reduction in flight options following the Merger has resulted in a
decrease in “demand for the entire travel industry, which hurts travel agencies’ ability to
survive”); Hr’g Tr. at 769:7–16 (Mar. 13, 2019) (Stansbury explaining that the Merger has
“further complicated [his job] by having to explain these ancillary fees, by having to go on and
purchase seats for people or pay ancillary fees”).21
Aside from economic harms, the Named Plaintiffs also complained of the deterioration in
quality of the overall flying experience as reflected in the decreased number of connecting flight
options from smaller hubs, a reduction in benefits and value in frequent flyer programs, a
21 	But as discussed in greater detail below, the Court previously ruled that the Plaintiffs’ testimony would
only be considered as to alleged harms they incurred as domestic airline customers in the relevant city-pair markets,
and not as alleged harms suffered by the public or by the Plaintiffs’ travel agent customers. See infra Discussion,
Section II.A.
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reduction in seat pitches and the reduction in quality of customer service. See, e.g., Fry Dir. Ex.
¶ 7 (stating that “air travel has continued to degrade” with smaller planes that were “most often
more crowded, with less legroom and smaller cabin facilities such as overhead storage”); Jolly
Dir. Ex. ¶¶ 12–13 (citing a reduction in available flight options); McCarthy Dir. Ex. ¶ 18
(asserting that the Merger has resulted in “less options, less seat assignments and availability,
and reduced customer service”); Rubinsohn Dir. Ex. ¶ 13 (noting reduced flight route options
between American and US Airways hubs and cities such as Raleigh, NC, Pittsburgh, PA and St.
Louis, MO); Stansbury Dir. Ex. ¶¶ 8, 18, 26 (stating that the Merger has resulted in reduced seat
availability, lack of seat assignments, lack of legroom, reduced or cancelled service on routes to
smaller cities and a loss of privileges for AAdvantage loyalty program members); Hr’g Tr. at
270:11–272:12 (Mar. 11, 2019) (Garavanian detailing the devaluation of his frequent flyer miles
and the “terrible” customer service he received after being bumped out of first class).
Certain of the Named Plaintiffs further attribute the alleged harms in part to the overall
consolidation of the airline industry generally, opining that “airline consolidation in general and
more specifically, the 2013 merger of American and [US Airways] has caused a loss of
competition in the industry.” Rubinsohn Dir. Ex. ¶ 8; Russell Dir. Ex. ¶ 11; Stansbury Dir. Ex. ¶
29; Talewsky Dir. Ex. ¶ 40; see also Brito Dir. Ex. ¶ 15 (concluding that competition has
decreased as a result of “consolidation in the airline industry and after the most recent merger of
[American] and [US Airways]”); Jolly Dir. Ex. ¶ 8 (stating that “airline consolidation in general
and more specifically, the 2013 merger of American and [US Airways], threatens to cause and
has caused a loss of competition in the industry”); McCarthy Dir. Ex. ¶ 18 (attributing the
alleged harms suffered to “airline mergers and consolidation and specifically the American
merger”).
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In addition to the Named Plaintiffs, Plaintiffs also called on William Douglas Parker to
testify during which he was questioned about, among other things, US Airways’ rationale for
pursuing the Merger and AMR’s proposed standalone business plan. See, e.g., Hr’g Tr. at
338:20–339:5 (Mar. 12, 2019) (questioning Mr. Parker concerning the estimated valuation of the
then-proposed Merger); id. at 357:20–358:3 (inquiring with Mr. Parker about his knowledge of
AMR’s plan to emerge from Chapter 11 on a standalone basis).
B. Plaintiffs’ Expert Witness Testimony
The testimony of Dr. Carl Lundgren, an economist and the Plaintiffs’ sole expert witness,
included the following: (1) the Lundgren Report; (2) the 2017 Lundgren Declaration; and (3) Dr.
Lundgren’s declaration, dated Dec. 21, 2018 (the “2018 Lundgren Declaration”). Lundgren Dir.
Ex. ¶¶ 1–4. The 2018 Lundgren Declaration updated the conclusions set forth in the Lundgren
Report and the 2017 Lundgren Declaration with “more recent data from the DB1B public
database published by the U.S. Department of Transportation, Bureau of Transportation
Statistics” spanning the period of July 1, 2017 through June 30, 2018. Id., Ex. 3 ¶ 3.
Specifically, Dr. Lundgren concluded in the 2018 Lundgren Declaration that 765 of the 1,008
DOJ City-Pairs would still be deemed to have presumptively illegal post-Merger HHI
concentration levels and level increases under the Horizontal Merger Guidelines, reflecting a
decrease from the 785 city-pairs previously described in the Lundgren Report. Id., Ex. 3 at 5.
With respect to average fares, Dr. Lundgren further concluded that 708 of the 1,008 DOJ City-
Pairs experienced an increase in average fares over the same time period, a decrease from the
723 city-pairs originally identified in the 2017 Lundgren Declaration. Id., Ex. 3 ¶ 13; see also
Hr’g Tr. at 847:16-24 (Mar. 13, 2019) (testifying that the fare growth figures exclude ancillary
fees but do account for the fares of LCCs and ULCCs). Dr. Lundgren stated that his opinion was
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“consistent with the facts, analysis and opinions” contained in each of the Lundgren Report, the
2017 Lundgren Declaration and the 2018 Lundgren Declaration. Lundgren Dir. Ex. ¶¶ 2–4.
VI. 	THE DEFENDANTS’ CASE
At trial, the Defendants called upon three expert witnesses—Daniel M. Kasper, Dennis
W. Carlton and Janusz A. Ordover—and one lay witness, Heather Garboden, for live testimony
in support of their case. The Defendants’ three expert witnesses offered testimony that assessed
the competitive impacts of the Merger on the airline industry. Each provided a different
perspective.
The first of the Defendants’ experts was Mr. Daniel M. Kasper, a specialist in the
transportation industry who serves as a senior consultant at the firm Compass Lexecon. See
Kasper Dir. Ex. ¶ 1; Hr’g Tr. at 975:14–17 (Mar. 14, 2019) [Adv. Proc. ECF No. 279]. Mr.
Kasper examined the airline industry prior to and following the Merger and concluded that the
industry was “intensely competitive before the [Merger] and remains so.” Kasper Dir. Ex. ¶ 7.
Mr. Kasper attributed the high levels of price competition in the pre-Merger airline industry to
the elimination of regulatory barriers and the pervasive presence of LCCs, which he argues have
and will continue to exert “downward pressure . . . on prices.” Id. ¶ 8. Additionally, Mr. Kasper
asserted that the recent mergers of other legacy carriers, whose business models are predicated
upon a hub-and-spoke structure, have further contributed to robust post-Merger competition in
the domestic airline market. See id. ¶¶ 10, 89. Mr. Kasper finally explained that the decrease
and later increase in airline capacity beginning in 2001 can be attributed to factors other than
legacy airline mergers (i.e., exogenous macroeconomic events and the subsequent strengthening
of the national economy resulting in increased demand for air travel). See id. ¶¶ 9, 62.
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The second of Defendants’ experts was Dr. Dennis W. Carlton, a professor of economics
at the Booth School of Business at the University of Chicago and a consultant at Compass
Lexecon. See Carlton Dir. Ex. ¶¶ 1, 4; Hr’g Tr. at 1236:9–14, 1237:2–5, 1239:4–10 (Mar. 15,
2019) [Adv. Proc. ECF No. 280]. Dr. Carlton previously served as Deputy Assistant Attorney
General for Economic Analysis at the Antitrust Division for the DOJ. See Carlton Dir. Ex. ¶ 3.
Dr. Carlton employed econometric analysis to examine the Merger and addressed the Plaintiffs’
claims of adverse competitive effects, as well as Plaintiffs’ claim that the Merger would
eliminate US Airways’ frequent flyer program. See Carlton Dir. Ex. ¶ 6. Underlying Dr.
Carlton’s analysis were certain baseline assumptions concerning the characteristics of the airline
industry, including the “substantial number of competitors on many of the routes; the importance
of [LCC] competition [on prices] on these routes; and the relative ease and frequency of entry on
most routes.” Id. ¶¶ 7, 14–15. In performing three different econometric studies, Dr. Carlton
looked to changes in total output and capacity as “key summary measures of competitive
effects.” Id. ¶ 13. Dr. Carlton noted that his methodology applied the “standard economic
approach” set forth in the Horizontal Merger Guidelines and related literature. Id. ¶ 11.
The first of Dr. Carlton’s three econometric studies, performed in 2013 on a retrospective
basis, examined the competitive impacts of the prior mergers of Delta and Northwest, as well as
United and Continental. See id. ¶¶ 20–23. The 2013 retrospective study, based in part on
regression analysis, concluded that the prior legacy carrier mergers had “no adverse effects on
competition.” Id. ¶¶ 20, 23. The second of the econometric studies, also performed in 2013 but
on a prospective basis, examined the Merger itself and predicted that the Merger would have a
procompetitive effect; he concluded that it would generate “substantial procompetitive output
expansions [that] would exceed, many times over, any plausible nominal fare increases from the
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transaction.” Id. ¶ 24. Dr. Carlton asserted that his conclusions would remain the same even
without the divestures that were part of the DOJ Settlement. See id. ¶ 35. Finally, in 2016, Dr.
Carlton performed a retrospective study of all three legacy carrier mergers and concluded that the
legacy carrier mergers, including the Merger, were procompetitive, thus confirming the results of
both his 2013 prospective and retrospective studies. See id. ¶¶ 41, 44. In reaching this
conclusion, Dr. Carlton focused on pre-merger overlapping routes between merging airlines. See
id. ¶ 37. Specifically as to the Merger, he found that it “reduced average fares, increased the
number of passengers flying, and increased the number of seats available.” Id. ¶¶ 7, 44. As for
the Plaintiffs’ assertion that the Merger would eliminate US Airways’ frequent flyer program,
Dr. Carlton concludes that this allegation was unfounded as US Airways has continued to offer
its frequent flyer program and such program was in fact expanded post-Merger. See id. ¶¶ 77,
79.
The last of the Defendants’ testifying expert witnesses, Dr. Janusz A. Ordover, serves as
a professor of economics at New York University and consultant at Compass Lexecon. See
Ordover Dir. Ex. ¶¶ 1, 4; Hr’g Tr. at 1139:7–12 (Mar. 14, 2019). Previously, Mr. Ordover
served as the Deputy Assistant Attorney General for Economics at the Antitrust Division for the
DOJ. See Ordover Dir. Ex. ¶ 2. He provided an “economic perspective” that specifically
addressed the Plaintiffs’ assertion that the Merger would “‘substantially increase’ the ‘prospects
for effective collusion among the airlines remaining after [the] [M]erger.’” Id. ¶ 5. Accounting
for the DOJ Settlement, Dr. Ordover concluded that the airline industry is not conducive to
effective coordination and the Merger did not enhance effective coordination. See id. ¶¶ 6–7. In
fact, he asserted that the airline industry was “highly competitive prior to the [M]erger and
remains so.” Id. ¶ 9. His conclusions were primarily driven by “overwhelming empirical
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evidence” and “substantiated, significant consumer benefits from this [M]erger,” observations
that the airline industry behaves in a manner consistent with “effective competition” such that the
Merger did not elevate the risks of “coordinated effects.” Id. ¶¶ 7, 103. Additionally, the
prevalence of LCCs, further enhanced by the divestitures that were part and parcel to the DOJ
Settlement, would “disrupt any form of coordination on prices or other competitive dimensions.”
Id. ¶¶ 7, 104.
In addition to the expert witnesses, Defendants also presented Heather Garboden to
testify as a lay witness solely as to facts within the scope of her employment. See Hr’g Tr. at
674:5–675:17 (Mar. 12, 2019) (holding that Heather Garboden’s testimony will be “appropriate”
as to facts stemming from her capacity as an employee). Ms. Garboden testified as to the
strategic rationale behind the Merger and internal post-Merger metrics that offer insight
concerning the impact of the Merger. See Garboden Dir. Ex. ¶ 5.
DISCUSSION
I. 	THE GOVERNING LEGAL FRAMEWORK
Generally, Section 7 of the Clayton Antitrust Act prohibits a merger or acquisition that
“itself may cause antitrust injury.” In re Zinc Antitrust Litig., No. 14-CV-3728, 2016 WL
3167192, at *22 (S.D.N.Y. June 6, 2016) (quoting Geneva Pharm. Tech. Corp. v. Barr Labs.
Inc., 386 F.3d 485, 511 (2d Cir. 2004)) (emphasis in original). Specifically, Section 7 provides:
No person engaged in commerce or in any activity affecting commerce shall
acquire, directly or indirectly, the whole or any part of the stock or other share
capital . . . where in any line of commerce or in any activity affecting commerce in
any section of the country, the effect of such acquisition may be substantially to
lessen competition, or tend to create a monopoly.
15 U.S.C. § 18 (emphasis added).
Any analysis performed under Section 7 is immersed in a realm of “probabilities, not
certainties or possibilities.” United States v. Baker Hughes, Inc., 908 F.2d 981, 984 (D.C. Cir.
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1990) (emphasis in original). In considering a merger’s effect on competition, modern courts
have applied a burden-shifting analysis in which plaintiffs bear the initial burden of establishing
a prima facie case. See id. at 982–83 (establishing a burden-shifting analysis to a horizontal
acquisition case);22 United States v. Waste Mgmt. Inc., 743 F.2d 976, 983–84 (2d Cir. 1984)
(concluding that the ease of entry into the relevant market was sufficient to rebut a prima facie
showing of illegality under a burden-shifting analysis); New York v. Deutsche Telekom AG, 439
F. Supp. 3d 179, 198–99 (S.D.N.Y. 2020) (applying the three-part burden shifting analysis to
assess a Section 7 claim); Saint Alphonsus Med. Ctr.-Nampa Inc. v. St. Luke’s Health Sys., Ltd.,
778 F.3d 775, 783 (9th Cir. 2015) (stating that “Section 7 claims are typically assessed under a
‘burden-shifting framework’”) (quoting Chi. Bridge & Iron Co. v. FTC, 534 F.3d 410, 423 (5th
Cir. 2008)); Summary Judgment Decision at 18:7–12 (“Modern case law provides for a burden-
shifting process in which plaintiffs typically establish a prima facie case with, for example,
market concentration statistics, and defendants attempt to rebut it by offering conflicting
evidence of the merger’s probable effects on competition.”).
Under such a framework, a plaintiff must first make a “showing that a transaction will
lead to undue concentration in the market for a particular product in a particular geographic area”
which establishes a “presumption that the transaction will substantially lessen competition.”
22 	Horizontal mergers are defined to be “mergers and acquisitions involving actual or potential competitors”
whereas vertical mergers encompass non-horizontal transactions, including, in its strictest form, the combination of
“firms or assets at different stages of the same supply chain.” Horizontal Merger Guidelines § 1 (defining horizontal
mergers); U.S. D EP ’ T OF J USTICE AND F ED. T RADE C OMM’ N , V ERTICAL M ERGER G UIDELINES § 1 (2020) (defining
vertical mergers). Notably, despite its initial formulation within the horizontal merger context, the Baker Hughes’
burden-shifting analysis has been applied to both horizontal and vertical mergers subject to differences in the type
and nature of evidence a plaintiff must present to satisfy its initial burden. See, e.g., United States v. Anthem, Inc.,
855 F.3d 345, 349 (D.C. Cir. 2017) (applying the Baker Hughes burden-shifting analysis to a horizontal merger);
United States v. AT&T, Inc., 916 F.3d 1029, 1032 (D.C. Cir. 2019) (stating that, in applying Baker Hughes to a
proposed vertical merger, a plaintiff must make a “fact-specific” showing that a merger is “likely to be
anticompetitive” as opposed to a mere offering of market concentration statistics to establish a prima facie case).
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Baker Hughes, 908 F.2d at 982. To satisfy this initial burden, plaintiffs have typically made a
showing, pursuant to the Horizontal Merger Guidelines, of post-merger HHI concentration levels
in excess of 2,500 and post-merger increases in HHI levels in excess of 200.23 See, e.g., United
States v. Anthem, Inc., 855 F.3d 345, 349 (D.C. Cir. 2017) (noting that the “most common way to
make [a] showing is through . . . [HHI]” and the application of the Horizontal Merger
Guidelines), cert. dismissed, 137 S.Ct. 2250 (2017); Baker Hughes, 908 F.2d at 983 & n.3
(utilizing the DOJ’s then-merger guidelines to conclude that the government “established a
prima facie case of anticompetitive effect” through its showing that the merger would
“significantly increase” concentration in an already highly concentrated market); Saint
Alphonsus, 778 F.3d at 788 (concluding that the “extremely high HHI on its own establishes the
prima facie case”). Such showings lead to presumptions of market concentration and the
enhancement of market power. See Horizontal Merger Guidelines § 5.3.
Once a plaintiff makes its prima facie case, the burden then shifts to a defendant to “rebut
[the] presumption” with “sufficient evidence” to show that the “prima facie case inaccurately
predicts the relevant transaction’s probable effect on future competition.” 	Baker Hughes, 908
F.2d at 982, 989, 991. A defendant may satisfy its burden by making an “affirmative[] showing
why a given transaction is unlikely to substantially lessen competition, or by discrediting the data
underlying the initial presumption in the [plaintiff’s] favor.” Id. at 991. The required sufficiency
of a defendant’s evidence, however, is directly proportional to the strength of plaintiffs’ prima
facie case. See id. (stating that “[t]he more compelling the prima facie case, the more evidence
23 	The Court notes that, while not binding on courts, the Horizontal Merger Guidelines serve a significant role
in the evaluation of proposed mergers. See Horizontal Merger Guidelines § 1 (noting that the Horizontal Merger
Guidelines were prepared in part to “assist . . . courts in developing an appropriate framework for interpreting and
applying . . . antitrust laws in the horizontal merger context”); Anthem, 855 F.3d at 349 (stating that the Horizontal
Merger Guidelines remain a “helpful tool” for analyzing proposed mergers).
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the defendant must present to rebut it successfully”). Once rebutted, the “burden of producing
additional evidence of anticompetitive effect shifts to the [plaintiff], and merges with the
ultimate burden of persuasion, which remains with the [plaintiff] at all times.” Id. at 983.
Throughout this case, Plaintiffs have consistently maintained that a line of Supreme
Court merger cases decided in the 1960s, which promulgated the “incipiency doctrine,”24 serve
as the governing legal standard for Section 7 claims.25 But as this Court has previously noted,
modern antitrust case law has evolved since the 1960s, developing into a more flexible, totality-
of-the-circumstances approach. See Fjord I, 502 B.R. at 39 n.12 (“[A] quick review of the
relevant antitrust case law suggests that antitrust law has evolved since the 1960s to encompass a
more flexible, industry-specific analysis.”); Summary Judgment Decision at 18:7–12 (noting that
modern antitrust case law adopts a burden-shifting analysis); see also Baker Hughes, 908 F.2d at
984 (stating that the “Supreme Court has adopted a totality-of-the-circumstances approach to
[Section 7], weighing a variety of factors to determine the effects of particular transactions on
competition”); United States v. AT&T Inc., 290 F. Supp. 3d 1, 4 (D.D.C. 2018) (discussing how a
merger should be analyzed within the “context of its particular industry” and “in light of a
24 	The phrase “incipiency doctrine” refers the congressional policy to restrict mergers that may lead to a
possible restriction of competition. See, e.g., Brown Shoe Co., Inc. v. United States, 370 U.S. 294, 346 (1962)
(stating that the court could not “avoid the mandate of Congress that tendencies toward concentration in industry
[were] to be curbed in their incipiency”); United States v. Von’s Grocery Co., 384 U.S. 270, 277 (1966) (discussing
the underlying congressional intent to enact Section 7 as a desire to “preserve competition among many small
businesses by arresting a trend toward competition in its incipiency before that trend developed to the point that a
market was left in the grip of a few big companies”); E.I. du Pont de Nemours & Co., 353 U.S. at 597 (defining
“incipiency” within this context to mean “any time when the acquisition threatens to ripen into a prohibited effect”).
25 	Plaintiffs argued repeatedly that the “incipiency doctrine” remains the controlling precedent. See, e.g., First
Amended Complaint ¶ 47 (asserting that the line of Supreme Court cases relying on the “incipiency doctrine” has
“never been overruled and remains controlling law”); Plaintiffs’ Proposed Findings of Fact and Conclusions of Law
¶ 15 (“Plaintiffs’ Proposed FOF/COL”) [Adv. Proc. ECF No. 273] (citing a line of “binding Supreme Court
precedents [that] recognized and developed what is known as the ‘incipiency doctrine’”); Hr’g Tr. at 10:25–11:5
(Mar. 11, 2019) (stating that the Plaintiffs “also rely on the Supreme Court decisions, none of which have been
overruled, and no action has been taken by Congress to overrule them, and with regard to those cases, [the Plaintiffs]
will be following the law on them”); Hr’g Tr. at 1274:13–1280:25 (Mar. 15, 2019) (cross-examining Defendants’
expert witness, Dr. Carlton, concerning his writings on “decisions by the Supreme Court . . . with regard to
mergers”).
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‘variety of factors’—including the transaction’s size, structure, and potential to generate
efficiencies . . . that ‘are relevant in determining whether a transaction is likely to lessen
competition’”) (citing Baker Hughes, 908 F.2d at 985 (internal quotation marks omitted)). This
shift in contemporary merger analysis towards a more comprehensive inquiry has its genesis in
United States v. Gen. Dynamics Corp., 415 U.S. 486 (1974). Citing Brown Shoe Co. v. United
States, 370 U.S. 294, 321–22 (1962), the Supreme Court in General Dynamics concluded that
“statistics concerning market share and concentration, while of great significance, were not
conclusive indicators of anticompetitive effects” and that a merger should be evaluated within
the “context of its particular industry.” Gen. Dynamics, 415 U.S. at 498. Since General
Dynamics, various courts—including the Second Circuit—have relied upon a multiplicity of
relevant factors in performing a Section 7 violation analysis. See Waste Mgmt., 743 F.2d at 981–
84 (considering ease of entry into the relevant product and geographic market in its
determination that the merger did not violate Section 7); see also Chi. Bridge, 534 F.3d at 437–
39 (offering a detailed analysis of a barriers-to-entry defense, ultimately determining that there
was substantial evidence to conclude that such defense was insufficient to rebut the prima facie
case); Anthem, 855 F.3d at 364 (affirming the lower court’s ruling after a consideration of the
“totality of circumstances,” including an examination of claimed merger-specific efficiencies);
Horizontal Merger Guidelines (offering in great detail the variety and types of evidence the DOJ
relies upon to determine whether a horizontal merger would substantially lessen competition).
II. 	APPLICATION OF THE BAKER HUGHES STANDARD
A. Relevant Market Definition and Plaintiffs’ Standing
Prior to analyzing a potential Section 7 violation, a court must first address the gating
issues of market definition and standing. See United States v. E.I. du Pont de Nemours & Co.,
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353 U.S. 586, 593 (1957) (“Determination of the relevant market is a necessary predicate to a
finding of a violation of the Clayton Act.”); Biocad, JSC v. F. Hoffman-La-Roche, Ltd., No. 16
Civ. 4226, 2017 WL 4402564, at *3 (S.D.N.Y. 2017) (“[A]ntitrust standing is ‘a threshold,
pleading-stage inquiry’”) (quoting Gatt Commc’ns, Inc. v. PMC Assocs., LLC, 711 F.3d 68, 75
(2d Cir. 2013)). As this Court has already held, city-pairs constitute the relevant market for
purposes of this proceeding.26 See Summary Judgment Decision at 26:2–5 (concluding that
Defendants’ judicial admission concerning the appropriate market definition was enough to
support a ruling that city-pairs constitute the “proper geographic market in this case”); Hr’g Tr.
at 53:19–20 (Mar. 11, 2019) (Defendants agreeing that “the city pair markets . . . are the relevant
markets here”); see also First Amended Complaint ¶ 32 (Plaintiffs asserting that “well-defined
submarkets exist which, in themselves constitute geographic and/or product markets for antitrust
purposes and include what are known as ‘city pairs’”); Fjord I, 502 B.R. at 40 (stating that
“Defendants accept that city-pairs are the properly defined market”). Moreover, within the
confines of this city-pairs market definition, the Court has already concluded that these Plaintiffs
have made a sufficient showing of standing, finding that Plaintiffs had established their standing
as airline customers. See Summary Judgment Decision at 40:20–22 (“Plaintiffs are best
positioned to bring an antitrust suit in their role as customers of air travel.”). But such standing
does not otherwise extend to allegations of harm suffered by their customers.27 See id. at 40:14–
26 	In its Summary Judgment Decision, the Court rejected the Plaintiffs’ national market theory. See Summary
Judgment Decision at 27:8–9 (holding that the Plaintiffs’ national market theory is “as deficient as ever”); Hr’g Tr.
at 54:11–14 (Mar. 11, 2019) (Defendants stating that they “agree that the relevant markets are city pairs” and noting
that the Court has “already held that there is no national market”).
27 	The Court held in its Summary Judgment Decision that Plaintiffs lacked standing in their capacity as travel
agents as they were not “efficient enforcers” of antitrust laws. Summary Judgment Decision at 47:15–19. In
reaching its conclusion, the Court noted that “Plaintiffs [were required to] demonstrate that they [had] remained
actual customers in the alleged relevant markets and made plans to patronize those markets again.” Id. at 42:11–13
(citing In re N.J. Title Ins. Litig., 683 F.3d 451, 461 (3d Cir. 2012)).
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18 (finding that Plaintiffs have standing “in certain markets as customers, but . . . [not] as travel
agents”); see also Hr’g Tr. at 89:3–8 (Mar. 11, 2019) (“[T]here was a ruling about standing and
what was decided was that the [P]laintiffs . . . did not have antitrust standing for purposes of their
role as travel agents.”).
Notwithstanding the Court’s conclusion that Plaintiffs have standing, the “Plaintiffs [at
trial] still retain[ed] the burden . . . of identifying which specific [c]ity [p]airs [were] relevant for
their claim.” Summary Judgment Decision at 46:12–14. In an attempt to satisfy this burden, the
Plaintiffs submitted a list of 298 city-pairs before trial as relevant to the Named Plaintiffs’
testimony, a notable decrease from the 1,008 city-pairs originally identified as presumptively
illegal in the Lundgren Report. See Joint Pretrial Order, Ex. 5; Hr’g Tr. at 913:12–19 (Mar. 13,
2019) (stating that Exhibit 5 to the Joint Pretrial Order contains “[t]hree hundred one” city-pairs
which include “three duplicates so . . . actually 298” city-pairs that are relevant to the Court’s
analysis); Hr’g Tr. at 957:7–16 (Mar. 14, 2019) (both Plaintiffs and Defendants affirmed they
were in agreement that their respective exhibits of city-pairs reflect the 298 city-pairs originally
designated in the Joint Pretrial Order).28 While the parties initially agreed as to the 298 city-
pairs comprising the relevant market, this number shifted during and after trial. See Plaintiffs’
Proposed FOF/COL ¶ 165 (asserting that the relevant market of city-pairs was instead 204 city-
pairs); Defendants’ Proposed FOF/COL ¶ 151 (asserting that the relevant market of city-pairs
was instead 228 city-pairs). Ultimately, both Plaintiffs and Defendants agreed that the relevant
The Court notes that the Defendants continue to dispute that Plaintiffs have in fact established standing.
See Defendants’ Proposed FOF/COL, Section IV(G) (arguing that Plaintiffs lack standing). But for the reasons
summarized above and set forth in the Court’s prior decisions, the Court overrules the Defendants’ objection based
on standing.
28 	The Court further notes that the Plaintiffs, in fact, listed only 296 city-pairs—as opposed to 298—in their
trial exhibit, a discrepancy not explained during trial. See PX-149 (listing 296 city-pairs as the relevant market).
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city-pairs for the Court’s consideration were the 204 city-pairs listed in Table A to the Plaintiffs’
Proposed FOF/COL. See Hr’g Tr. at 17:5–6 (Apr. 26, 2019) [Adv. Proc. ECF No. 286]
(Plaintiffs’ counsel stating that “[t]he 204 . . . are the presumptive illegal markets in which the
Plaintiffs flew”); id. at 19:1–3 (Plaintiffs’ counsel stating that “for purposes of liability . . . you
would use the numbers in which the Plaintiffs were threatened and that would be the 204”); id. at
20:18–23 (Plaintiffs’ counsel affirming that “the Court should be looking at the 204” in
determining whether a violation of Section 7 exists); id. at 66:20–21 (Defendants’ counsel stating
that, on the particular issue of standing, Plaintiffs would need to “show . . . injury in these 204
markets”). Accordingly, the Court’s Decision will address the Plaintiffs’ claims as to these 204
city pairs.29
B. Post-Merger Evidence
While most antitrust trials challenging a merger occur before consummation and thus, are
limited to assessing the facts prior to any merger, that is not the case here.30 In such
29 	The Plaintiffs state that the 204 city-pairs listed in Table A to the Plaintiffs’ Proposed FOF/COL are
comprised “[o]f the city pairs . . . which Plaintiffs have flown or will fly in the future [where] presumptively illegal
concentrations exist.” Plaintiffs’ Proposed FOF/COL ¶ 165. The Court understands the 204 city-pairs to indicate
that the Named Plaintiffs have flown or will fly on 204 of the 765 city-pairs that Dr. Lundgren previously identified
in the 2018 Lundgren Declaration as having presumptively illegal post-Merger HHI concentration levels and level
increases under the Horizontal Merger Guidelines. See also Hr’g Tr. at 17:3–10 (Apr. 26, 2019) (Plaintiffs’ counsel
stating that “there is the 765, which was an initial . . . part of the presumptive illegal markets. The 204, you know . .
. are the presumptive illegal markets in which the Plaintiffs flew on . . . [and allege] would likely fly in the future”).
30 	The language of Section 7 is forward-looking in assessing an acquisition that “may” substantially lessen
competition. 15 U.S.C. § 18; see also E.I. du Pont de Nemours & Co., 353 U.S. at 597 (noting that the objective of
the Clayton Antitrust Act was “primarily to arrest apprehended consequences of inter corporate relationships before
those relationships could work their evil, which may be at or any time after the acquisition, depending on the
circumstances of the case”); H.R. REP . N O. 94-1373, at 7 (1976), as reprinted in 1976 U.S.C.C.A.N. 2637 (noting
that “Section 7 is an ‘incipiency’ statute . . . intended to halt monopolies and restraints of trade in their initial stages,
before they ripen into full-scale Sherman Act violations”). The federal pre-merger notification and waiting-period
system for large mergers and acquisitions established under the Hart-Scott-Rodino Antitrust Improvements Act of
1976 (the “HSR Act”), 15 U.S.C. § 18a, has contributed to this trend of pre-merger challenges. See ABA Antitrust
Law Section, Competition/Consumer Protection Policy and North American Comments Task Force, Analyzing the
Scope of Enforcement Actions Against Consummated Mergers in a Time of Heightened Scrutiny (Apr. 2020) at 1–2
& n.3, https://ourcuriousamalgam.com/wp-content/uploads/Consummated-Mergers-Policy-Task-Force-Apr-2020-
FINAL.pdf (noting that “most U.S. merger enforcement challenges are made before the underlying merger has taken
place” in part due to an emphasis on pre-merger analysis under the HSR Act); see also H.R. REP . N O. 94-1373, at 8
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circumstances, post-merger evidence may be potentially probative and relevant for a court’s
review of the competitive impact of a merger. See, e.g., Gen. Dynamics, 415 U.S. at 504–06
(finding that the lower court’s use of post-merger evidence was “justified” as such evidence
“went directly to the question of whether future lessening of competition was probable”);
Horizontal Merger Guidelines § 2.1.1 (indicating that “[e]vidence of observed post-merger price
increases or other changes adverse to customers is given substantial weight” when evaluating a
consummated merger); see also Horizontal Merger Guidelines § 5.3 (considering “both the post-
merger level of market concentration and the change in concentration resulting from a merger”
when examining market concentrations). Not surprisingly, both Plaintiffs and Defendants have
submitted post-Merger evidence for the Court’s consideration, including Dr. Lundgren’s 2018
calculations, lay testimony from certain Named Plaintiffs and Dr. Carlton’s retrospective
econometric studies. See, e.g., 2018 Lundgren Declaration ¶ 3 (summarizing his updated
findings using post-Merger data from 2017 and 2018); Carlton Dir. Ex. ¶¶ 36–44 (discussing his
retrospective analysis of data from 2016); Fry Dir. Ex. ¶ 5 (summarizing his domestic flight
history since June 2017).
A court, however, may not blindly rely on post-merger evidence. To be considered, such
evidence must not be the product of manipulative behavior of “violators [attempting to] stave off
. . . actions merely by refraining from aggressive or anticompetitive behavior when such a suit
(stating that the HSR Act was proposed to provide the government a “realistic chance” to challenge mergers and
address larger mergers before they “become almost unchallengeable” post-consummation). Indeed, challenges to
mergers have occurred prior to or shortly after consummation. See, e.g., E.I. du Pont de Nemours & Co., 353 U.S.
at 598 (noting that “[p]rior cases under [Section] 7 were brought at or near the time of acquisition”); Baker Hughes,
908 F.2d 981 (reviewing a lower court’s denial to issue an injunction to enjoin a proposed acquisition); Anthem, 855
F.3d 345 (reviewing a lower court’s granting of a permanent injunction of a proposed merger between the second-
and third-largest national health insurance carriers); see also New York v. Kraft Gen. Foods Inc., 926 F. Supp. 321
(S.D.N.Y. 1995) (assessing a Section 7 challenge to a merger brought approximately 5 weeks after its
consummation); United States v. Bazaarvoice, Inc., No. 13-CV-00133-WHO, 2014 WL 203966 (N.D. Cal. Jan. 8,
2014) (assessing a Section 7 challenge to a merger approximately one year after the merger closed).
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[is] threatened or pending.” Gen. Dynamics, 415 U.S. at 504–05. Indeed, courts have
recognized that determination of the probative value of post-merger evidence is tied to whether it
is possible for such evidence to be easily manipulated. Compare Chi. Bridge, 534 F.3d at 435
(stating that the probative value of post-merger evidence easily subject to manipulation is
“deemed limited”) with United States v. Bazaarvoice, Inc., No. 13-CV-00133-WHO, 2014 WL
203966, at *4 (N.D.Ca. 2014) (noting that “post-merger evidence that is not subject to
manipulation is of greater probative value, and may be dispositive”); see also Lektro–Vend Corp.
v. Vendo Co., 660 F.2d 255, 276 (7th Cir. 1981) (holding that “post-acquisition evidence
favorable to a defendant can be an important indicator of the probability of anticompetitive
effects,” particularly where such evidence “could not reflect deliberate manipulation by the
merged companies [to] temporarily . . . avoid anticompetitive activity”); United States v. Int’l
Harvester Co., 564 F.2d 769, 780 (7th Cir. 1977) (holding that post-merger evidence that is
“beyond the power of the parties to manipulate” may be properly considered).
Applying these principles here, the Court concludes that the post-Merger evidence here is
appropriate and helpful in assessing the Section 7 inquiry now before it. Considering the amount
of time that has passed since the consummation of the Merger in 2013 and the nature of the
evidence presented, the Court finds little basis, if any, to suggest that the evidence submitted is
subject to American’s manipulation. The majority of the evidence provided by Defendants
centers on market trends involving third parties such as LCCs and ULCCs, as well as industry
metrics on pricing, capacity and output spanning a period of up to five years. If anything, the
protracted passage of time since the closing of the Merger makes the conclusions derived from
the post-Merger evidence even more compelling.
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C. Plaintiffs’ Prima Facie Case
Under the burden-shifting Section 7 analysis, plaintiffs generally bear the initial burden
of formulating a prima facie case, which may be established on “only one factor, market
concentration.” Baker Hughes, 908 F.2d at 984; see also Summary Judgment Decision at 18:7–
12 (stating that a prima facie case is typically established with market concentration statistics).
The Plaintiffs’ prima facie case here rests on two principal allegations: (1) that the Merger has
led to presumptively illegal market concentrations in relevant city-pair markets as reflected in
Dr. Lundgren’s HHI calculations and (2) that there has been a general market trend towards an
increase in concentration in the domestic passenger airline industry over the past year. See
Summary Judgment Decision at 50:23–51:5 (citing the First Amended Complaint at 12 & App.
A and Plaintiffs’ Cross-Motion at 12–15).
The Court finds that Plaintiffs have satisfied their burden of establishing a prima facie
Section 7 case based on the updated post-Merger HHI calculations provided in the 2018
Lundgren Declaration with respect to each of the 204 city-pairs comprising the relevant market.
While the 80% reduction in relevant city-pairs from the Plaintiffs’ original 1,008 DOJ City-Pairs
to the 204 number now before the Court is striking, the Court finds that the concentration
statistics provided by Plaintiffs for the 204 city-pairs satisfy the requirements set forth in the
Horizontal Merger Guidelines. See Horizontal Merger Guidelines § 5.3. Plaintiffs indicated that
post-Merger HHI concentration levels and changes in HHI levels for each of the 204 city-pairs
were in excess of 2,500 and 200, respectively. See Plaintiffs’ Proposed FOF/COL, Table A.
Specifically, Dr. Lundgren’s calculations reflected 2018 HHI levels for the relevant city-pairs
ranging from 2,640 to 9,635 and changes in HHI levels from 2012 to 2018 ranging from 215 to
5,693, levels which were sufficiently high under the Horizontal Merger Guidelines to establish a
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presumption of anticompetitive concerns.31 See id. (providing the city-pairs for which, pursuant
to Dr. Lundgren’s HHI calculations, are “presumptively illegal” under the DOJ’s Horizontal
Merger Guidelines); see, e.g., United States v. Anthem Inc., et al., 236 F. Supp. 3d 171, 257
(D.D.C. 2017), aff’d, 855 F.3d 345 (D.C. Cir. 2017) (holding that plaintiffs’ post-merger market
share and HHI concentration figures were “sufficiently large” to establish a prima facie case);
United States v. H&R Block, Inc., 833 F. Supp. 2d 36, 72 (D.D.C. 2011) (concluding that a post-
merger change in HHI levels of approximately 400 and a post-acquisition HHI level of 4,691
was sufficient to establish a prima facie case of anticompetitive effects); FTC v. H.J. Heinz Co.,
246 F.3d 708, 716 (D.C. Cir. 2001) (finding that a post-merger increase in HHI levels of 510
points established a presumption of anticompetitive effects by a “wide margin” pursuant to the
Horizontal Merger Guidelines). Generally speaking, only the “closest available approximation”
of market shares and HHI estimates is all that is needed; exact precision is not necessary.32
Anthem, 236 F. Supp. 3d at 207 (stating that plaintiffs “need not present market shares and HHI
estimates with the precision of a NASA scientist”) (quoting FTC v. Sysco Corp., 113 F. Supp. 3d
1, 54 (D.D.C. 2015)); see also H&R Block, 833 F. Supp. 2d at 72 (indicating that a “reliable,
reasonable, close approximation of relevant market share is sufficient”).
Additionally, the Court notes that there is a “clear general trend towards concentration” in
the domestic airline industry, a fact not contested by Defendants. Summary Judgment Decision
31 	Notably, Defendants “[do] not assert that Plaintiffs have failed to meet their prima facie burden.”
Defendants’ Proposed FOF/COL ¶ 70.
32 	As previously noted, Dr. Lundgren attempted to replicate the DOJ’s HHI figures as set forth in the DOJ
Complaint and acknowledged that although there was a 98% correlation between his calculations and the DOJ’s
calculations, “most [of his] HHI calculation[s] . . . showed deviations.” Lundgren Report at 5. Nonetheless, Dr.
Lundgren believed that, because of the high correlation between the two sets of figures, any antitrust conclusions
derived would essentially be the same. See id. at 14. Since only an approximation is required to establish a prima
facie case, the Court will not address the precision of Dr. Lundgren’s HHI calculations at this juncture. Indeed,
Defendants do not take any position as to the accuracy of Dr. Lundgren’s calculation of HHI figures in his various
reports and declarations. See Defendants’ Proposed FOF/COL ¶ 69.
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at 53:24–55:24 (discussing the mergers among the other large passenger airlines in recent years
as well as Plaintiffs’ assertions concerning barriers to entry). Accordingly, the Court concludes
that Plaintiffs have sufficiently established a prima facie case of anticompetitive effects in the
relevant market.
D. Defendants’ Rebuttal Case
Generally, “[i]t is a foundation of [S]ection 7 doctrine . . . that evidence on a variety of
factors can rebut a prima facie case.” Baker Hughes, 908 F.2d at 984. Indeed, courts have
looked to a number of factors in deciding whether defendants have made a successful rebuttal,
including, among other things: ease of entry, market share and concentration, industry structure
and supply and demand elasticities. See id. at 985 (citing examples of a multiplicity of factors
that courts have considered in determining whether a prima facie case has been rebutted). While
there is no clear standard governing a defendant’s rebuttal of a prima facie case, there is a
general principle of direct proportionality between the compelling nature of a prima facie case
and the amount of evidence that a defendant must present to successfully rebut a presumption of
undue concentration. See FTC v. CCC Holdings Inc., 605 F. Supp. 2d 26, 46–47 (D.D.C. 2009)
(stating that despite a lack of a clear standard, “[t]he more compelling the prima facie case, the
more evidence the defendant must present to rebut [the presumption] successfully”) (quoting
Baker Hughes, 908 F.2d at 991) (internal quotations omitted). To rebut the Plaintiffs’ prima
facie showing, Defendants have submitted, among other things, both expert and lay witness
testimony on the various effects of the Merger on the airline industry.
i. 	Dr. Carlton’s Econometric Analysis
Defendants’ expert witness, Dr. Carlton, presented three separate econometric analyses to
rebut Plaintiffs’ allegation that the Merger had resulted in presumptively illegal market
concentrations. Courts have generally recognized and accepted the use of econometric analysis
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in evaluating a potential Section 7 violation. See, e.g., United States v. AT&T Inc., 310 F. Supp.
3d 161, 215–18 (D.D.C. 2018), aff’d, 916 F.3d 1029 (D.C. Cir. 2019) (determining that Dr.
Carlton’s regression analysis provided “significant, real-world evidence” and could be afforded
probative weight in predicting the potential pricing effects of a challenged vertical merger); New
York v. Kraft Gen. Foods Inc., 926 F. Supp. 321, 333–35, 341 (S.D.N.Y. 1995) (evaluating
econometric analysis from both plaintiffs and defendants in assessing a potential Section 7
violation); see also Horizontal Merger Guidelines § 6.1 (stating that in determining extent of
unilateral effects and “[w]here sufficient data are available, the Agencies may construct
economic models designed to quantify the . . . price effects resulting from the merger”). Dr.
Carlton’s first study examined the retrospective impact of prior legacy carrier mergers, his
second analyzed the prospective impact of the Merger as of 2013 and his third reviewed the
retrospective impact as of 2016 of the last three legacy airline mergers, including this Merger.
See Carlton Dir. Ex. ¶ 7. The Court finds these three studies—and Dr. Carlton’s related
testimony—to be credible and very persuasive evidence.
Dr. Carlton’s first study is a 2013 retrospective analysis, employing a “variety of
analyses, including the use of regression techniques” and concluding that the prior two legacy
mergers of Delta and Northwest and United and Continental Airlines “did not generate
anticompetitive fare increases or output reductions.” Id. ¶ 23. Specifically, the 2013
retrospective study examined overall trends in post-9/11 ASMs and found that capacity had, in
fact, increased following each of the two prior legacy mergers. See id. ¶ 21. Notably, the 2013
study further concluded that fluctuations in airline capacity were “effectively . . . mirror image[s]
of . . . pattern[s] in unemployment,” thereby suggesting that capacity reductions in the years prior
to the Merger were likely “associated with poor macroeconomic conditions” and not with other
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legacy airline mergers. Id. ¶ 22. The results of Dr. Carlton’s 2013 retrospective study lend
support to the notion that, despite the airline industry’s overall trend towards concentration, the
prior legacy airline mergers did not, as of 2013, result in anticompetitive effects.
Dr. Carlton next performed a prospective study in 2013 to investigate the potential
competitive impact of the then-proposed Merger. 	See id. ¶ 24. 	Specifically, Dr. Carlton
concluded that the Merger would yield considerable consumer benefits as a result of improved
network quality and thus would have a procompetitive effect. See id. Incorporating American’s
internal estimates that the Merger could lead to an overall increase of 2.9 million passengers (or
approximately 2.8%)33 for the combined entity, Dr. Carlton estimated that the Merger, on a
“conservative” basis, would produce over $900 million in “consumer benefits associated with
[the] merged-party traffic increases,” which he viewed as “direct evidence of the increase in
[post-Merger] network quality.” Id. ¶ 25–26, 29; see also id. ¶ 25 (indicating that his
monetization of consumer benefits, based on an estimation of demand elasticity, was built upon
“well-accepted methodologies . . . also relied upon by DOJ staff to assess past airline mergers”).
Coupling this with overestimates of possible post-Merger fare increases from separate published
papers,34 Dr. Carlton concluded that the estimated $900 million in consumer benefits would far
33 	American’s estimate was achieved through QSI modeling, a planning tool generally utilized among airline
carriers in the ordinary course to predict traffic levels for schedules of flights by all carriers. See Carlton Dir. Ex. ¶
27.
34 	Dr. Carlton’s estimated fare increases were based on the following: (1) “Baseline fare concentration
effects” figures derived from Dr. Carlton’s own study and (2) “BLS fare effects” figures derived from Jan K.
Brueckner, Darin Lee & Ethan S. Singer, Airline Competition and Domestic US Airfares: A Comprehensive
Reappraisal, 2 E CON. OF TRANSP . 1 (2013). Carlton Dir. Ex. ¶ 32 & n.2.
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exceed any possible adverse impacts on prices, resulting in significant net consumer benefits.35
See id. ¶ 33.36
Finally, Dr. Carlton performed a final retrospective study in 2016 that examined the
competitive impact of the last three legacy carrier mergers, including the Merger, on both a
collective and individual basis.37 The results of the 2016 retrospective study confirmed the
conclusions of Dr. Carlton’s prior 2013 studies and found that, as of 2016, the Merger did not
have an anticompetitive impact. See id. ¶¶ 38, 44. Rather, the 2016 retrospective study found,
among other things, that the Merger produced “procompetitive output expansions on nonstop
overlap routes, indicating reductions in quality-adjusted fares38 and a lack of anticompetitive
effects on connecting overlaps.” See id. ¶ 44.
Of particular significance is the 2016 retrospective study’s use of the multiple regression
“difference-in-differences” technique39 and its findings on overlapping routes served by either
both merging carriers or one of the merging carriers and one other carrier, the routes where
35 	The fare increase estimates were predicated upon the assumption that there would be “no rival response to a
merger which combine[d] two carriers on a route.” Carlton Dir. Ex. ¶ 32.
36 	The 2013 prospective study did not account for the divestitures that were a part of the DOJ Settlement. See
Carlton Dir. Ex. ¶ 35. Dr. Carlton opined that the estimated net consumer benefits would be even greater to the
extent the DOJ Settlement produced additional benefits to consumers. See id.
37 	The data used for the 2016 study was derived from the DB1B database, the same database used by Dr.
Lundgren, as well as airline schedules from the Official Airline Guide and the T100 (Form 41) database from the
Bureau of Transportation Statistics. See Carlton Dir. Ex. ¶ 40.
38 	To estimate changes in quality-adjusted fares that cannot generally be directly computed, Dr. Carlton relied
on the assumption that output as measured in number of passengers and quality-adjusted fares were inversely
related. See Carlton Dir. Ex. ¶ 39 (noting that this was done to recognize that quality-adjusted fares may have
decreased despite an increase in nominal fares).
39 	The “difference-in-differences” estimation methodology, a “standard econometric technique,” is a form of
multiple regression analysis that compares changes in a treatment group versus changes in a control group to capture
general trends while controlling for outside factors. See Carlton Dir. Ex. ¶ 38 (summarizing the “difference-in-
differences” estimation methodology); see also Hr’g Tr. at 1248:3–11 (Mar. 15, 2019) (Carlton testifying that the
difference-in-differences methodology is used to “evaluate the effect of . . . a treatment, in this case a merger . . .
[and] allows you to isolate what is the effect of . . . the merger as distinct from all other factors in the industry”).
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anticompetitive impacts likely would be most pronounced. See id. ¶¶ 37–38. Specifically, Dr.
Carlton compared changes on these potentially affected routes (i.e., a “treatment” group) against
changes on routes likely not impacted by the merger (i.e., a “control group”), allowing for the
isolation of merger effects and the suggestion of a causal impact.40 See id. ¶ 38. The
“difference-in-differences” methodology allows for the accounting of “confounding effects of
non-merger related changes in economic conditions, identifying the merger effects by relying on
effects experienced only on overlap routes but not on control routes, with common changes
across overlap and control routes attributed to non-merger related changes.” Id. As noted in the
publication of Dr. Carlton’s 2016 retrospective study in the International Journal of Industrial
Organization, the “difference-in-differences” methodology “account[s] for inflation when
examining changes in fares over time.” Dennis Carlton, Mark Israel, Ian MacSwain & Eugene
Orlov, Are Legacy Airline Mergers Pro- or Anti-Competitive? Evidence from Recent U.S. Airline
Mergers, 62 I NT ’ L J. OF INDUS . O RG. 58, 66 n.8 (2019); see Carlton Dir. Ex. ¶ 7 (noting the
publication of the 2016 retrospective study in the “peer-reviewed International Journal of
Industrial Organization”). Examining nonstop routes where the impact of the Merger would be
most evident, Dr. Carlton found that prices after the Merger decreased by approximately 12.3%,
the number of passengers (i.e., output) increased by approximately 20.2% while the number of
available seats (i.e., capacity) increased by approximately 19.6%. See Carlton Dir. Ex. ¶¶ 37, 43.
Dr. Carlton’s findings of an increase in output on these routes are consistent with other findings
of increases in American’s capacity since the Merger was consummated. See Garboden Dir. Ex.
40 	The 2016 retrospective study examined both nonstop and connecting routes. With respect to nonstop
routes, the “treatment” group was comprised of pre-merger routes where the merging parties were either the only
two nonstop carriers (“2-to-1 nonstop routes”) or were two of three nonstop carriers (“3-to-2 nonstop routes”). See
Carlton Dir. Ex. ¶ 41. In contrast, the “control group” was generally comprised of connecting or non-nonstop
overlapping routes comprised of the same number of nonstop carriers as those in the “treatment” group during the
respective pre-merger period. Id. Similar analysis was used to examine overlap connecting routes, comparing such
routes against non-overlap connecting routes. Id.
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¶ 27, Table 4 (reflecting an annual increase in ASMs for American beginning in 2013).
Moreover, Defendants have shown that such increases in output continued for another two years
following Dr. Carlton’s final study. See id. ¶ 26 (noting an increase of 8.5% in total ASMs from
2013 through 2018); id. ¶ 29 & Table 5 (stating that there was a “5% increase in total annual
seats on American flights alone for flights to and from its 9 hubs” between 2013 and 2018).
The conclusions set forth in Dr. Carlton’s 2016 retrospective study on overlapping
routes—where anticompetitive effects likely would be most evident—are especially compelling
because the study utilized methodologies that isolated merger effects and accounted for factors
such as inflation. Impacts on prices, market output and capacity are generally considered
indicators of a merger’s competitive impact, and showings of increased output have been found
to overcome claims of anticompetitive effects in other antitrust contexts. See, e.g., Ohio v. Am.
Express Co., 138 S.Ct. 2274, 2288 (2018) (stating that, in evaluating alleged violations under the
Sherman Act, the court “[would] ‘not infer competitive injury from price and output data absent
some evidence that tends to prove that output was restricted or prices were above a competitive
level’”) (quoting Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 237
(1993)); Brooke Grp., 509 U.S. at 237 (noting, in a predatory price discrimination suit under the
Robinson-Patman Act, “[w]here . . . output is expanding at the same time prices are increasing,
rising prices are equally consistent with growing product demand”); cf. Horizontal Merger
Guidelines § 2.2.1 (“Explicit or implicit evidence that the merging parties intend to raise prices,
reduce output or capacity . . . after the merger, or explicit or implicit evidence that the ability to
engage in such conduct motivated the merger, can be highly informative in evaluating the likely
effects of a merger.”).
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Dr. Carlton also pointed out difficulties with Dr. Lundgren’s approach. Dr. Carlton
examined changes in airfares for the 15 largest city-pairs of the 1,008 presumptively illegal city-
pairs Dr. Lundgren initially identified in the Lundgren Report. See Carlton Dir. Ex. ¶ 65. He
found that Dr. Lundgren’s calculations reflect decreased average airfares for 13 of the 15 routes
between 2012 and 2018. See id. Moreover, to the extent such changes in airfares are weighted
by traffic, the weighted average fare actually decreased over the same period, implying that the
average customer actually paid less post-Merger. See id. ¶ 66. Similarly, Dr. Carlton looked at
changes in fares for the 15 largest city-pairs of the 298 city-pairs originally identified in the Joint
Pretrial Order as comprising the relevant market for this proceeding.41 See id. ¶ 68; Joint Pretrial
Order, Ex. 5 (listing the 298 city-pairs relevant to the Named Plaintiffs’ testimony to comprise
the relevant market for purposes of this proceeding). He also found that average fares typically
fell and, when weighted by traffic, average passengers paid approximately the same post-Merger
as they did pre-Merger. See Carlton Dir. Ex. ¶¶ 68–69. Of the 15 largest city-pairs in the subset
of 298 city-pairs, 11 of these city-pairs remain as part of the relevant market for purposes of this
proceeding. Compare Carlton Dir. Ex., Dem. 8 with Plaintiffs’ Proposed FOF/COL, Table A
(listing the 204 city-pairs ultimately comprising the relevant market).
Taken together, Dr. Carlton’s three econometric analyses and his related testimony
credibly demonstrate that the Merger has expanded airline output, and that it has resulted in a
reduction of average fares, an increase in the number of total passengers, and an increase in the
41 	Plaintiffs criticize Dr. Carlton for his failure to individually address all of the 1,008 city-pairs identified as
presumptively illegal in the Lundgren Report as well as the subset of 298 city-pairs initially comprising the relevant
market for this proceeding. See Plaintiffs’ Proposed FOF/COL ¶ 327 (“Dr. Carlton’s study did not analyze all 1,008
city pair relevant markets identified in Plaintiffs’ First Amended Complaint or all 298 city pairs identified by
Plaintiffs in this case”). The Court notes that Dr. Carlton’s analysis was prepared prior to the commencement of
trial during which time the number of city-pairs that Plaintiffs sought to include as the relevant market was in flux.
As previously discussed, the Plaintiffs further modified the number of relevant city-pairs downward to 204 after the
start of trial. See Plaintiffs’ Proposed FOF/COL, Table A. Given the changing scope and number of relevant city-
pairs over the course of this proceeding, the Court rejects Plaintiffs’ criticism of Dr. Carlton on this score.
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number of seats available. See Carlton Dir. Ex. ¶¶ 7, 44. Dr. Carlton has demonstrated that
competition in the relevant markets and the airline industry generally remains robust and that the
Merger has not substantially lessened competition. Dr. Carlton’s studies are particularly
compelling when juxtaposed against Dr. Lundgren’s testimony primarily centered on HHI
calculations for the 204 city-pairs comprising the relevant market. Generally speaking, HHI
calculations alone are only a starting point in an antitrust inquiry. See Anthem, 236 F. Supp. 3d
at 209 (noting that the Horizontal Merger Guidelines “make clear that calculating market shares
and applying them in the HHI is a predicate step to determining whether agencies need to
investigate a potential merger further”); FTC v. Warner Comm’ns, Inc., 742 F.2d 1156, 1163 n.1
(9th Cir. 1984) (holding that concentration statistics merely provide a “meaningful context
within which to address the question of [a] merger’s competitive effects”); Chi. Bridge, 534 F.3d
at 432 (cautioning that a party was “plac[ing] too much weight on the HHIs as a dispositive
measure of market concentration” in light of other existing evidence). Rather, HHI calculations
are primarily useful in providing a useful framework and starting point for a more fulsome
analysis of competition in the relevant market. See Horizontal Merger Guidelines § 5.3 (stating
that market concentration is “often one useful indicator of [the] likely competitive effects of a
merger . . . used in conjunction with other evidence of competitive effects” and “may not fully
reflect the competitive significance of firms in the market or the impact of a merger”). In fact,
Dr. Lundgren himself acknowledged that higher HHIs are merely “associated with an increased
likelihood of reduced competition.” Hr’g Tr. at 809:2–6 (Mar. 13, 2019) (emphasis added); see
also Carlton Dir. Ex. ¶ 9 (discussing how an increase in HHI “by itself is not evidence of harm to
competition”); id. ¶ 50 (providing a hypothetical situation where a single firm’s increase in
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output results in an overall increase in HHI despite other firms remaining unchanged to illustrate
a scenario in which increases in HHI may be entirely consistent with increases in competition).
ii. 	Other Evidence of Competition in the Airline Industry
The Defendants’ other evidence further rebuts the Plaintiffs’ prima facie case. In the five
years after the Merger’s consummation, measures of airline capacity—total seats, total ASMs
and total passengers flown—for both American individually as well as the airline industry
overall have seen notable increases. See Garboden Dir. Ex. ¶¶ 26–27 (stating that from 2013-
2018, American saw “a 4.5% increase in total seats, a 4.6% increase in total passengers flown,
and an 8.5% increase in total ASMs” while the largest U.S. airlines have seen year-by-year
increases in capacity). In the same vein, post-Merger TRASM in real dollars, after accounting
for inflation, has also declined for both American and the overall industry. See Garboden Dir.
Ex. ¶¶ 41–43 & Tables 8–10 (finding that overall TRASM for American and the airline industry
has declined since the Merger in a manner consistent with fluctuations in fuel prices).
Additional characteristics of the airline industry further reflect a continuing trend of
robust competition. Foremost of these is the continued vitality of LCCs. The evidence
conclusively establishes that they remain a formidable competitive force within the airline
industry and place downward pressure on air fares—a phenomenon that even Plaintiffs’ own
witnesses, including Dr. Lundgren, have acknowledged.42 See, e.g., Hr’g Tr. at 823:6–22 (Mar.
42 	Plaintiffs, citing to a study prepared by the Government Accounting Office, have argued that the Southwest
Effect “may not be as prominent following a merger,” a contention derived from a finding that Southwest had raised
fares in markets following the mergers of Delta and Northwest and US Airways and America West. Hr’g Tr. at
427:12–428:6 (Mar. 11, 2019). However, as noted, Plaintiffs’ own witnesses, including Dr. Lundgren, have offered
both statements and anecdotal observations which detract from Plaintiffs’ assertions.
Additionally, Plaintiffs’ assertions run contrary to the findings set forth in the paper, “Airline Competition
and Domestic U.S. Airfares: A Comprehensive Reappraisal,” published in the Economics of Transportation, which
both parties refer to and rely upon for its methodologies. See Brueckner, Lee & Singer, supra note 34; Lundgren
Report at 9 & n.3 (describing his adoption of the authors’ approach for combining airports into city markets in an
attempt to replicate the DOJ’s HHI figures); Lundgren Report, Ex. B (including a copy of the cited paper); Carlton
Dir. Ex. ¶ 32 (discussing his use of the authors’ fare estimates in addition to his own to evaluate the impact of the
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13, 2019) (Dr. Lundgren stating during direct examination that “[i]n those markets where the
LCCs are operating, there would be—I’m going to assume that they have lower, the legacy
airlines, that those fares are lower typically. Yes, [LCCs] would bring down the average in those
markets.”); Hr’g Tr. at 110:16–111:4 (Mar. 11, 2019) (Rubinsohn agreeing that his observation
that airfares were “significantly less” on routes where Southwest flies was an example of the
“Southwest Effect”). Given their low-cost business model and relatively younger aircraft fleet,
LCCs remain poised for additional growth and expansion. See Kasper Dir. Ex. ¶¶ 43–46 (stating
that LCCs are likely to continue their growth, largely driven by the expansion of ULCCs whose
cost structures are lower than even that of Southwest or JetBlue). While there are substantial
capital costs for new entrants into the airline industry generally, barriers to entry for existing
carriers into new routes are relatively low, suggesting that the further expansion of LCCs and
ULCCs remains a possibility.43 See Parker Dir. Ex. ¶ 7 (highlighting the “low barriers to entry
into routes”); Kasper Dir. Ex. ¶ 50 (stating that “LCC entry into particular city-pairs can (and
does) occur rapidly”). Indeed, the expansive growth of LCCs over the past several years reflects
the degree to which LCCs are able to enter into routes. See, e.g., Kasper Dir. Ex. ¶ 50 (noting
that Spirit, a ULCC, added non-stop service to 25 new destinations from Dallas Fort-Worth
between 2011 and 2013); id. (noting that LCC flights at three slot-controlled airports increased
Merger). The Court notes the paper concludes that “most forms of legacy-carrier competition have weak effects on
average fares” while LCC competition has “dramatic fare impacts, whether it occurs on the airport-pair, at adjacent
airports, or as potential competition.” Brueckner, Lee & Singer, supra note 34, at 1; see also id. at 2 (highlighting
the study’s empirical findings that show decreases in airfares where LCCs are present).
43 	Plaintiffs argue that there are substantial barriers to entry in the airline industry based on the assertion that
there have not been any major airline entrants to the market in recent years. See First Amended Complaint, ¶¶ 159–
60 (stating that there have only been two new major carrier entrants in recent years and no “new, viable competitors
in the national market since 2000”); Plaintiffs’ Proposed FOF/COL ¶¶ 181, 185 (noting testimony of Daniel Kasper
acknowledging that Virgin America was the last major airline carrier to enter the market in 2007) (citing Hr’g Tr. at
1040:16–22 (Mar. 14, 2019)). But Plaintiffs do not themselves provide any further evidence or analysis to support
their contention, which the Court finds unpersuasive given the continued expansion of LCCs.
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more than nine-fold between 1999 and 2016); id. ¶ 61 (“LCCs have more than quintupled their
share of the U.S. domestic airline market . . . [and] 87% of all domestic air passengers travel on
city-pairs that are served by at least one LCC”).44
In sum, Defendants were uniquely positioned to observe the effects of the Merger several
years after its consummation given the timing of trial in this case. This evidence about the
airline industry pre- and post-Merger, as well as an analysis of the impact of the Merger
specifically through the use of econometric methodologies (which isolate and control for factors
such as inflation), was highly persuasive in supporting Defendants’ position. Moreover, given
the length of time that has passed since the Merger, the potential for manipulation of post-Merger
evidence appears improbable. Given all the compelling evidence outlined above that has been
presented by the Defendants, the Court concludes that Defendants have easily overcome
Plaintiffs’ prima facie showing.45
iii. 	Evidence of the Merger’s Efficiencies
Defendants have also turned to purported efficiencies in support of their position. Some
courts have considered a merger’s efficiencies when evaluating an antitrust claim. See Deutsche
Telekom, 439 F. Supp. 3d at 207 (noting that the trend among lower courts has been to
44 	Indeed, as previously discussed, the Merger itself was driven in part by a desire to strengthen American and
US Airways’ ability to compete with LCCs and ULCCs. See Parker Dir. Ex. ¶ 32 (noting that LCCs have “entered
many of these routes since the Merger”); Kasper Dir. Ex. ¶ 73 (noting that American’s initial foray into bankruptcy
was driven in part by “heightened competition from LCCs”). The recent gate and slot divestitures that were part of
the DOJ Settlement may further strengthen the competitive position of LCCs. See Carlton Dir. Ex. ¶ 17 (noting that
the role of LCC competition was “enhanced by the slot and gate divestitures agreed to in the settlement of the DOJ
litigation”).
45 	Defendants have further argued that the Merger resulted in additional procompetitive efficiencies,
stemming from the combination of American and US Airways’ complementary networks. They believed that the
merging of the airlines’ networks would yield “significant benefits for consumers, particularly with respect to travel
options”—resulting in procompetitive benefits to consumers generally as well as to smaller communities—and
increased efficiencies in infrastructure investments and the expansion of its fleet aircraft. Defendants’ Proposed
FOF/COL ¶ 89; see id. ¶¶ 95, 97–98; Kasper Dir. Ex. ¶ 86.
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“recognize or at least assume that evidence of efficiencies may rebut the presumption that a
merger’s effects will be anticompetitive, even if such evidence could not be used as a defense to
an actually anticompetitive merger”); see also Anthem, 855 F.3d at 355 (stating that the court
will “proceed on the assumption that efficiencies as presented by Anthem could be such a
defense under a totality of the circumstances approach”); Saint Alphonsus, 778 F.3d at 790
(stating that the court will “assume . . . [that] a defendant can rebut a prima facie case with
evidence that the proposed merger will create a more efficient combined entity and thus increase
competition”); cf. Deutsche Telekom, 439 F. Supp. 3d at 208 (noting that claimed efficiencies
must be “both merger-specific and verifiable”); Anthem, 855 F.3d. at 356 (stating that to be
deemed merger-specific, any claimed efficiency must be shown to be unachievable “by either
company alone because, if [it] can, the merger’s asserted benefits can be achieved without the
concomitant loss of a competitor.’”) (citing Heinz, 246 F.3d at 722); Horizontal Merger
Guidelines § 10 (describing when efficiencies would be deemed merger-specific). While the
Court finds Defendants’ evidence of efficiencies both credible and persuasive, the Court does not
need to rely upon the purported efficiencies claimed by Defendants in reaching its conclusion
today given that the Defendants’ other evidence discussed above easily overcomes Plaintiffs’
prima facie case.
iv. 	Likelihood of Coordination in the Airline Industry
Nonetheless, while the Court finds the Defendants’ evidence discussed above to be
credible and convincing, it is not persuaded by one aspect of Defendants’ case. The Defendants
have argued, in part, that conditions in the airline industry are generally not conducive to
effective coordination and that the Merger itself was not likely to enhance such coordination to
the detriment of competition. See Ordover Dir. Ex. ¶¶ 6–7. They explain that successful
coordination hinges upon participants’ ability to enforce coordination, which is dependent upon
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the “availability of key information concerning market conditions, transactions, and individual
competitors.” Id. ¶¶ 11, 15–16; see also id. ¶¶ 12–13 (noting that successful coordination is less
likely when parties are unable to monitor rivals’ behavior and rivals must adjust prices or
strategic actions in response to market conditions). Transparency and full and complete
knowledge as to participants’ actions is critical. See id. ¶ 16 (stating that “transparency is an
especially important factor” for parties to both reach terms of coordination and to detect and
punish detractors). Defendants assert that the industry is not conducive to coordination, in part,
because airlines are unable to properly monitor other airlines’ pricing behavior as the “process of
setting fares and determining how many seats (if any) to offer at each fare and at each point in
time is highly complex,” resulting in an “essentially opaque” system. Id. ¶¶ 25, 27.
But the Court finds the Defendants’ arguments regarding the transparency of airline
carrier pricing to be unpersuasive given the history of this bankruptcy. In the main bankruptcy
case before this Court, the Debtor AMR sought the Court’s approval of its motion to reject
certain collective bargaining agreements pursuant to Section 1113 of the Bankruptcy Code. See
generally Debtors’ Section 1113 Application; AMR I, 477 B.R. at 393. As part of that
proceeding, AMR submitted the expert testimony of Daniel Kasper, one of the same experts who
testified in this matter. In explaining the economic challenges facing AMR and the airline
industry as a whole, Mr. Kasper opined that there is now “an unprecedented level of price
transparency resulting from online distribution channels to exert further downward pressure on
fares over the past decade.” Declaration of Daniel M. Kasper in Support of Debtors’ Motion to
Reject Collective Bargaining Agreements Pursuant to 11 U.S.C. § 1113 ¶ 72 [Case No. 11-
15463, ECF No. 2041, Ex. 1] (emphasis added). A result of this increased transparency has been
the “increased commodization of airline travel, especially for price sensitive passengers.” Id. ¶
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73. He attributed the newfound transparency to the “rapid spread of Internet-based airfare search
engines [which has] greatly reduced (indeed, almost eliminated) the costs of searching for the
lowest possible fares.” Id. ¶ 72. Having found Mr. Kasper to be a highly credible witness in that
prior proceeding as well as in this case, the Court cannot reconcile Mr. Kasper’s statements
concerning “unprecedented” transparency for consumers with the notion that sophisticated
corporations (like airlines) lack the ability to monitor fellow competing airlines’ prices. Thus,
the Court is not convinced that that coordination within the airline industry is unlikely. But
given the wealth of other evidence provided by Defendants, the Court’s view about coordination
does not impact the Court’s ultimate conclusions concerning the Merger.
v. 	Plaintiffs’ Reliance on the Standalone Plan
Plaintiffs seek to undercut Defendants’ case by relying on the standalone plan that was
discussed in the bankruptcy case before the Merger was proposed. Plaintiffs harp on the fact that
American’s capacity increase of 8.5% fell well short of the projected 20% capacity growth over
the course of five years under American’s standalone plan. See, e.g., Hr’g Tr. at 12:12–17 (Mar.
11, 2019) (noting that American intended to increase its capacity by approximately 20% over a
five-year period); Hr’g Tr. at 372:22–376:3 (Mar. 12, 2019) (suggesting that America, along
with other legacy carriers, “rationalized” or reduced capacity since 2005). But Plaintiffs have
failed to demonstrate why a merger should be deemed anticompetitive simply because a merged
company failed to ultimately meet a projected benchmark as to capacity or output that was made
under an alternative restructuring plan.
Moreover, Plaintiffs’ reliance on the projection in the standalone plan takes that
projection out of context. Bankruptcy courts are routinely presented with projections as a basis
for confirmation of a plan or other purposes. The projection relied upon by Plaintiffs here was
presented as part of a Section 1113 application by Debtor AMR that sought permission to reject
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its collective bargaining agreements with its unions. See generally Motion of Debtors for Entry
of Order Pursuant to 11 U.S.C. § 1113 Authorizing Debtors to Reject Collective Bargaining
Agreements [Case No. 11-15463, ECF No. 2035] (“Debtors’ Section 1113 Application”); AMR I,
477 B.R. at 417 (discussing the propriety of American formulating a standalone business plan).
That proceeding examined whether Debtor AMR’s proposed changes to the collective bargaining
agreements were necessary for reorganization. As such, the focus was on the Debtors’ proposed
changes to the collective bargaining agreements viewed in the context of AMR’s ongoing losses.
The capacity increase projected was but one part of AMR’s multifaceted standalone plan of that
was the backdrop to an evaluation of AMR’s extensive and complex proposed change to the
collective bargaining agreements. See AMR I, 477 B.R. at 401–02 (describing the various
elements of the standalone plan). And even where projections are central to an inquiry before
the Bankruptcy Court, they are best understood as estimates based on available information, with
such estimates considered as less reliable the further out in time they extend. See id. at 415
(noting that satisfaction of Section 1113(b)’s requirement that a proposal be “based on the most
complete and reliable information available at the time” is difficult to satisfy because “available
information may change based on the twists and turns of the bankruptcy”); cf. Kasper Dir. Ex. ¶¶
75–76 (explaining that airlines “respon[d] to . . . changing economic and competitive
conditions,” lending support to the notion that projections are not guarantees and remain subject
to ever-changing economic factors). This is powerfully demonstrated by the current economic
difficulties of businesses stemming from the current unforeseen COVID-19 pandemic.
Relatedly, Plaintiffs assert that the many of Defendants’ claimed benefits were achievable absent
the Merger, rendering the Merger unnecessary. See Plaintiffs’ Proposed FOF/COL ¶¶ 241–75
(arguing that American and US Airways’ standalone plans for growth obviated the need for the
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Merger); id. ¶¶ 290–93 (arguing that American could have achieved an expansion of its network
through codesharing as provided for under its standalone plan which “included agreements with
its unions to increase its code sharing [sic] arrangements for which American received approval
as part of the restructuring process”). But once again, that is not the inquiry now before the
Court, which is whether the Merger violates Section 7 of the Clayton Antitrust Act. In any
event, Plaintiffs’ assertions about codesharing ignore the history of this case. Under AMR’s
motion to reject its collective bargaining agreements, AMR did seek approval to enter into
unlimited codesharing agreements. See AMR I, 477 B.R. at 431–32. But the Court denied that
request. While the Court acknowledged that increases in codesharing could be beneficial, it
ultimately held that American had not shown “by a preponderance of the evidence . . . that
essentially unlimited codesharing [was] necessary to achieve a successful reorganization.” Id. at
433. Additionally, Plaintiffs failed to offer any other evidence to establish that codesharing
could serve as a viable alternative to the Merger. In fact, Mr. Kasper testified that codesharing
was generally a “considerably inferior” method to expand a network as opposed to a merger due
to the lack of ability to “coordinate schedules . . . [and] pricing.” Hr’g Tr. at 1056:24–1057:6
(Mar. 14, 2019); see also id. at 1087:12–1088:14 (Kasper stating that the “literature . . . is quite
clear, and that is that a merger has far more economic benefit for the consumers [sic] than
codesharing”).46
46 	While the Plaintiffs’ argument about whether the Merger was really necessary is not the relevant inquiry
now before this Court, Plaintiffs have not demonstrated that the standalone plan was as good or better in creating
value for stakeholders as the Merger. Indeed, the Merger that was the basis for AMR’s ultimate plan of
reorganization, eventually proved to be highly successful in maximizing value for its constituents and stakeholders,
including providing for recovery to equityholders, a rare occurrence in Chapter 11 proceedings. See, e.g., Conor
Shine, What’s Next for American Airlines Five Years After its Merger with US Airways, Dall. Morning News, Dec.
9, 2018, https://www.dallasnews.com/business/local-companies/2018/12/09/what-s-next-for-american-airlines-five-
years-after-its-merger-with-us-airways/; AMR Shareholders to Receive Rare Value from Chapter 11, Reuters, Feb.
14, 2013, https://www.reuters.com/article/americanairlines-merger-equity/amr-shareholders-to-receive-rare-value-
from-chapter-11-idUSL1N0BF0T020130215 (highlighting that American’s shareholders expected to receive
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E. Plaintiffs’ Additional Evidence of Anticompetitive Effects
With Defendants’ successful rebuttal of Plaintiffs’ prima facie case, the burden now
shifts to Plaintiffs to produce sufficient additional evidence of the Merger’s anticompetitive
effects. See Baker Hughes, 908 F.2d at 983. To satisfy their burden, Plaintiffs have submitted
additional information from Dr. Lundgren and testimony from a number of the Named Plaintiffs.
i. 	Dr. Lundgren’s Additional Calculations
In addition to his initial HHI figures, Dr. Lundgren submitted unweighted average47 fare
and passenger growth calculations for the relevant city-pairs. He contends that a subset of this
data demonstrates fare increases for 2012 through 2016, as well as weighted average fare growth
calculations for the FY 2016 Dataset.48 See 2017 Lundgren Declaration (calculating unweighted
average fare and passenger growths for the period of 2012 through fiscal year 2016 for
individual city-pairs and an overall average fare growth weighted by passengers on all routes that
experienced increases); 2018 Lundgren Declaration (calculating unweighted average fare and
passenger growths for the period of 2012 through fiscal year 2018 for individual city-pairs). To
compute unweighted averages for each relevant city-pair, Dr. Lundgren employed the following
formula: the change in the average fare or passenger growth between 2012 and the respective
recoveries valued at approximately $350 to $400 million, something “unusual in Chapter 11 cases—and
unprecedented in recent airline restructurings”).
47 	The phrase, “unweighted average,” simply refers to an arithmetic mean. See Hr’g Tr. at 1262:22–1263:20
(Mar. 15, 2019) (Carlton testifying that Dr. Lundgren took a “simple average” of fluctuations in average fares). In
contrast, a “weighted average” is defined to be “an average that can attach more importance (weight) to some
observations than to others.” G RAHAM U PTON & I AN COOK, Weighted Average, in A D ICTIONARY OF S TATISTICS
(3d. ed. 2014), https://www.oxfordreference.com/view/10.1093/acref/9780199679188.001.0001/acref-
9780199679188-e-1741.
48 	Of the 298 city-pairs parties comprising the relevant market at the beginning of trial, 78 city-pair routes had
nominal average fares that decreased, resulting in only 220 city-pairs reflecting an unweighted increase. See PX-
149; see also supra note 28 (noting that PX-149 lists 296 city-pairs as opposed to 298). Of the remaining 204 city-
pairs being considered at the end of trial, Plaintiffs identified 54 city-pair routes where nominal average fares had
decreased, resulting in 150 city-pairs reflecting an unweighted increase. See Plaintiffs’ Proposed FOF/COL, Table
B.
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year of the dataset (i.e., either 2016 or 2018) divided by the corresponding fare or passenger
growth figure for 2012. See 2017 Lundgren Declaration ¶ 12; 2018 Lundgren Declaration ¶ 14.
Finally, Dr. Lundgren’s 2017 declaration further includes an average of the change in fares
weighted by passenger growth on all routes that experienced unweighted average increases for
the period 2012 through fiscal year 2016. See 2017 Lundgren Declaration, Annex A. Plaintiffs’
primary evidence of alleged anticompetitive effects stems from the alleged changes in average
fares in a subset of the city-pairs identified, which Dr. Lundgren states “are presented without
further analysis or conclusions based on statistical, econometric, or other expert economic
analysis.” 2017 Lundgren Declaration ¶ 3.
Plaintiffs assert that Dr. Lundgren’s average fare calculations are sufficient to establish a
causal link between the Merger and the observed post-Merger average fares. But the Court
disagrees for a variety of reasons. First, Dr. Lundgren’s fare calculations do not account for
inflation and, therefore, do not shed any light as to the changes in average fares in real-dollar
terms that would permit more informed and accurate comparisons. See Hr’g Tr. at 878:4–11
(Mar. 13, 2019) (Dr. Lundgren conceding that his nominal fares calculations “[do] not talk about
inflation . . . [but rather] the average fare growth in terms of the fares paid in 2012 and the fares
paid in 2016”); id. at 880:1–10 (Dr. Lundgren further conceding that “there is no part of [his]
average fare work that is presented in either of [his] two reports that tries to convert the nominal
data into real dollars”). In fact, as Dr. Carlton noted in his testimony, Dr. Lundgren’s estimated
7.9% increase in unweighted average fares overall between 2012 and fiscal year 2018 was in
actuality lower than the inflation rate over the same period, implying that “in real terms the price
. . . if [the Court] accepted it . . . means in real terms [that] prices are falling.” Hr’g Tr. at
1262:22–1263:20 (Mar. 15, 2019).
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Without addressing the effect of inflation on airfares, one cannot conclude that the
Merger is responsible for changes in post-Merger prices. See Carlton Dir. Ex. ¶ 64 (noting that
Dr. Lundgren “presents no analysis that accounts for changes in economic conditions . . . and
how such changes . . . affected airline fares independent of any purported effect of the Merger”);
Hr’g Tr. at 1248:9–17 (Mar. 15, 2019) (Carlton testifying that he used the “difference-in-
differences” methodology to “isolate what is the effect of, say, the merger as distinct from all
other factors in the industry . . . [including] inflation [and] a whole bunch of things that are going
on”); see also Carlton, Israel, MacSwain, & Orlov, supra p. 58 , at 58 (stating that because “fares
are affected by many economic factors other than the number of competitors on a route and those
factors may be changing over time . . . a simple before-and-after examination of nominal fares
on routes affected by [a] merger risks attributing the merger trends in fares that may have some
other causes”) (emphasis added); id. at 66 n.8 (“Generally, one needs to account for inflation
when examining changes in fares over time.”). Considerations of the impact of inflation are
even more paramount where there has been a considerable passage of time. See Carlton Dir. Ex.
¶ 9 (highlighting that Dr. Lundgren’s analysis spans over a period of approximately five-and-a-
half years).
Indeed, courts performing antitrust analysis have considered whether fluctuations in
prices could be explained by inflation or otherwise attributed to anticompetitive behavior. See,
e.g., Brooke Grp., 509 U.S. at 213 (noting, as part of its evaluation of a claim under the
Robinson-Patman Act, that “[l]ist prices for cigarettes increased in lockstep, twice a year, for a
number of years, irrespective of the rate of inflation”); Cablevision Sys. Corp. v. FCC, 649 F.3d
695, 712 (D.C. Cir. 2011) (affirming the FCC’s findings in its issued order that, among other
things, there was still “evidence that cable prices have risen in excess of inflation”) (citing to In
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re Review of the Comm'n's Program Access Rules & Examination of Program Tying
Arrangements, 25 FCC Rcd. 746, 776 ¶ 42 (2010)); United States v. Eastman Kodak Co., 853 F.
Supp. 1454, 1473 (W.D.N.Y. 1994) (citing to defendant’s expert’s conclusion that, among other
things, “inflation-adjusted film prices have declined over the previous two years, due primarily . .
. to increasing competition” in evaluating whether relief from an antitrust consent decree was
warranted). Because Dr. Lundgren did not control for inflation, concrete conclusions or even
inferences cannot be drawn concerning whether the changes in airfares were actually caused by
the Merger as opposed to other factors.
Second, Dr. Lundgren’s average fare calculations do not account for changes in output,
capacity, or quality adjustments during the relevant periods of time, all of which may impact
airfares. See Hr’g Tr. at 881:6–15 (Mar. 13, 2019) (Dr. Lundgren acknowledging that his
nominal fares computations do not account for industry capacity or output); id. at 882:8–883:10
(Dr. Lundgren conceding that his methodology does not account for changes in quality which
could have otherwise been achieved through the use of a “hedonic model,” a model that allows
for the adjustment of price data to account for changes in quality). Determination of pricing in
the airline industry is a multifaceted and complex process and is contingent upon a number of
factors, including capacity, which Plaintiffs themselves acknowledge can result in fluctuations in
prices. See Ordover Dir. Ex. ¶ 27 (describing the “highly complex” price-setting process of the
airline industry); Plaintiffs’ Proposed FOF/COL ¶ 280 (stating that “[a]irlines use GDP growth
as a predictor of demand to calibrate capacity”); First Amended Complaint ¶ 107 (asserting that
“[c]apacity reduction has resulted in higher prices for fares and other services”). As such, the
Court is unable to draw any conclusions from Dr. Lundgren’s analysis as to whether the
variations in airfares are the result of the Merger as opposed to other factors.
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Third, Dr. Lundgren treated each city-pair equally, not accounting for the amount of
airline traffic. See 2018 Lundgren Declaration ¶ 14 (describing his computation methodology).
When a weighted analysis is actually done, average fares on the largest city-pairs appear to have
fallen between 2012 and 2018 as previously discussed. See Carlton Dir. Ex. ¶¶ 65–68 (noting
that if changes in fares for each of the 1,008 city-pairs were weighted by traffic, the weighted
average fare has fallen by 2.1% to 5.3% depending on the weighting performed); Hr’g Tr. at
888:24–889:22 (Mar. 13, 2019) (Dr. Lundgren acknowledging that the calculations submitted in
connection with the 2018 Lundgren Declaration did not include an examination of the impact of
number of passengers on changes in average fares). Oddly, only the 2017 Lundgren Declaration
included any sort of a weighted analysis, diminishing the ability to perform any meaningful
comparisons between Dr. Lundgren’s 2017 and 2018 findings or draw his intended inferences as
to trends. The lack of a weighted analysis in his 2018 findings forecloses a conclusion that, at
least as of 2018, the average passenger paid more on an identified route pre-Merger than post-
Merger. See Carlton Dir. Ex. ¶ 66 (stating that, after weighing each city-pair by traffic, the
weighted average fare fell, “imply[ing] that the average passenger . . . paid less after the Merger
than before the Merger”).
Fourth and finally, Dr. Lundgren’s analysis begins in 2012, approximately one year prior
to the consummation of the Merger. Thus, his baseline for comparison does not portray the
actual state of the airline industry and market at the time of the Merger. This calls into question
whether anyone may confidently conclude or even infer that any changes in fares actually
stemmed from the Merger.
On whole, Dr. Lundgren’s barebones calculations—that fail to account for outside
factors—do not support Plaintiffs’ contention that the Merger resulted in higher post-Merger
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prices for certain city-routes, let alone establish a causal relationship between the Merger and
post-Merger fares.49 Accordingly, the Court finds that Dr. Lundgren has failed to sufficiently
demonstrate that the Merger resulted in an increase in airfares on the identified city-pairs.
ii. 	Analysis of the Named Plaintiffs’ Testimony
Plaintiffs have also submitted testimony from various Named Plaintiffs about purported
harms they have allegedly suffered because of the Merger. Plaintiffs’ testimony, however, is
largely anecdotal and fails to establish a causal relationship between these alleged harms and the
Merger, rendering this evidence insufficient to establish a showing of the Merger’s supposed
anticompetitive impact.
First and foremost, many of the Named Plaintiffs’ alleged harms are a laundry list of
general grievances concerning the state of the airline industry untethered from the Merger. See,
e.g., Hr’g Tr. at 81:14–20 (Mar. 11, 2019) (Rubinsohn testifying that because he was no longer at
the “top of the frequent flyer list,” he was no longer “boarding in the first group”); id. at 84:15–
22 (Rubinsohn testifying that due to the closer spacing between seats, there is “not as much knee
room as there used to be”); Hr’g Tr. at 572:9–15 (Mar. 12, 2019) (Brito testifying that first-class
passengers were no longer entitled to lounge access); id. at 574:3–7 (Brito testifying that in-flight
seats “don’t recline as much and you have less legroom”); id. at 612:23–614:17 (Jolly testifying
that prices had “increased” because there was a reduction in availability of seats that could be
purchased with frequent flier miles and she instead was required to use cash); id. at 636:8–21
49 	As previously noted, the Court rejected the admission of the Lundgren Supplemental Report to the extent
that it sought to include new opinions concerning the competitive impact of the Merger. See Exclusion Order at 4–7
(denying the Plaintiffs’ request to admit the Lundgren Supplemental Report on grounds that, among other things, the
Lundgren Supplemental Report did not constitute a “supplement” under Federal Rules of Civil Procedure Rule 26(e)
and the timing of the request was inappropriate); see also Reconsideration Order (denying Plaintiffs’ request for
permission to serve the Lundgren Supplemental Report or, in the alternative, for the Court to reconsider the ruling
under the Exclusion Order). As the underlying reasoning for the exclusion of the Lundgren Supplemental Report is
set forth in detail in the Exclusion and Reconsideration Orders, the Court will not repeat that analysis here today.
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(Jolly testifying that she was “harmed” by an incident with an American employee: “I was on a
flight and I was watching the movie, and the flight attendant came from behind me and slammed
a can of Coke down on my tray. And I said, I did not order that. And she said, I know you
didn’t because you had your headphones in and you couldn’t hear me. And I just said, please
take it away.”); Hr’g Tr. at 717:4–718:6 (Mar. 13, 2019) (Talewsky testifying that the quality of
food service for first-class had declined because he received a “cold meal” and “on a coast-to-
coast flight . . . [he] got, like, a fig bar . . . [and] [t]here was maybe a piece of fruit”). Moreover,
some of Plaintiffs’ grievances were the direct product of circumstances and choices made by the
Named Plaintiff and thus, provided little insight into the industry. See, e.g., Hr’g Tr. at 245:3–21
(Mar. 11, 2019) (McCarthy testifying that she was “forced” to pay over $3,600.00 to purchase a
first-class ticket due to a lack of availability of coach seats when she booked tickets one day
prior to her desired travel date); id. at 247:17–248:20 (McCarthy testifying that she elected to
pay $761 for a first-class flight from Fort Myers to Newark after considering her checked bag,
“comfort and value” and “timing”). Plaintiffs have not offered any persuasive explanation as to
how the Merger bears a relationship to such alleged harms.50
Indeed, the weight of the credible evidence suggests that any of the Plaintiffs’ purported
“injuries” likely originate not from the Merger itself, but rather from industry changes,
particularly amongst legacy carriers, in response to the growth and proliferation of LCCs and
ULCCs. See Kasper Dir. Ex. ¶ 41 (discussing how ULCCs have “unbundled” ancillary services,
allowing consumers to elect which services they would like to purchase, including carry-on
luggage and seat selection); id. ¶ 42 (noting that, in response to the proliferation of ULCCs,
50 	The Court had previously highlighted this issue in its Summary Judgment Decision and Plaintiffs have not
made any effort to address this problem at trial. See Summary Judgment Decision at 43:19–22 (stating that the
“Court agrees with the Defendants about the generality and irrelevance of many of the complaints and statements
included”).
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legacy carriers have adopted “basic” economy fares where, in exchange for a discounted fare,
certain ancillary services are unbundled); see also Hr’g Tr. at 1085:8–23 (Mar. 14, 2019)
(Kasper testifying that legacy carriers were “forced into [unbundling services] kicking and
screaming” as a result of a need to compete with LCCs and ULCCs). In fact, the implementation
of baggage fees specifically predates the consummation of the Merger. See Hr’g Tr. at 123:11–
124:4 (Mar. 11, 2019) (Rubinsohn testifying that he “[paid] for baggage before the [M]erger on
American); Hr’g Tr. at 625:13–626:3 (Mar. 12, 2019) (Brito testifying that the “baggage fees
started when the fuel crisis [occurred in] 2008, 2010”); id. at 656:9–23 (Jolly testifying that the
“baggage fees were implemented prior to the [M]erger . . . in 2008”). Sole reliance on the mere
coincidence that the alleged harms occurred post-Merger cannot and does not alone establish a
conclusion of causation. See Lavoho, LLC v. Apple, Inc., 232 F. Supp. 3d 513, 530 (S.D.N.Y.
2016) (stating that plaintiffs’ reliance on the timing of events to prove causation is “a post hoc
ergo propter hoc logical fallacy” and is insufficient to satisfy their burden), aff’d sub nom.,
Diesel eBooks, LLC v. Simon & Schuster, Inc., 869 F.3d 55 (2d Cir. 2017). Given the credible
evidence before the Court, Plaintiffs have not established a “plausible chain of causation”
between the Merger and these subsequent events, rendering Plaintiffs’ attempts to make a
showing of adverse competitive effects utterly lacking. Fjord III, 527 B.R. at 888–89.
Moreover, the timing of Plaintiffs’ alleged harms often fails to align with the Merger; that
is, the claimed harms supposedly occurred before the Merger was ever consummated. See, e.g.,
Hr’g Tr. at 109:12–17 (Mar. 11, 2019) (Rubinsohn alleging harm because Pittsburgh and Raleigh
ceased to be hubs but later acknowledged that both, in fact, ceased being hubs “way before the
[M]erger”); id. at 153:3–10 (Russell alleging harm because only American served her preferred
airport in Waco but later acknowledged that Continental, a former competitor at the Waco
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location, had in fact dropped its flights at least a year prior to the consummation of the Merger);
Hr’g Tr. at 274:23–275:11 (Mar. 12, 2019) (Garavanian acknowledging that the issues he
experienced in booking flights from Boston to Miami on American in 2013 occurred prior to the
closing of the Merger); Hr’g Tr. at 785:12–786:8 (Mar. 13, 2019) (Stansbury acknowledging that
the “increase in fares [she] observed on [a] Reno to New York flight could not have been a result
of the American/US Airways [M]erger”). As the Court has recognized, Plaintiffs bear the
burden of making a showing as to how such alleged harms, which occurred pre-Merger, may be
attributed to the consummation of the Merger itself. See Fjord III, 527 B.R. at 889 (noting that
“all of these alleged harms occurred before the American merger” and that “Plaintiffs have failed
to allege any plausible explanation as to how the American merger relates to this harm”); see
also Summary Judgment Decision at 44:13–17 (noting that the “declarations are filled with
complaints that do not appear on their face to be tied to the [M]erger, as well as the irrelevant
criticisms of other non-defendant airlines and comments about trips that took place long before
the [M]erger”).
Named Plaintiffs’ testimony is also riddled with other issues which greatly diminish its
persuasiveness. For example, multiple Named Plaintiffs testified to harms experienced on flights
and routes that fall outside of the scope of the relevant market and this proceeding, including
testimony concerning international flights as well as flights taken on city-pair routes not
identified by Dr. Lundgren as being presumptively illegal. See, e.g., Hr’g Tr. at 164:21–165:20
(Mar. 11, 2019) (Russell alleging harm on a flight from Dallas to Fort Lauderdale, a route that
Dr. Lundgren did not argue was a city-pair that had experienced an increase in concentration); id.
at 201:4–15 (Fry acknowledging that only 2 of the last 38 flights he has flown were included in
Dr. Lundgren’s report); id. at 236:15–19 (McCarthy acknowledging that only 6 of the 105 city-
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pairs she alleged experienced harm were included in Dr. Lundgren’s report); id. at 246:3–14
(McCarthy acknowledging that her written testimony included an international flight to Punta
Cana, Mexico); Hr’g Tr. at 583:25–584:3 (Mar. 12, 2019) (Brito acknowledging that the
majority of his flying is comprised of international travel); Hr’g Tr. at 744:23–745:9 (Mar. 13,
2019) (Talewsky acknowledging that the alleged harmful incident he suffered from occurred on
an international flight from Tokyo to Chicago).
Similarly, Named Plaintiffs testified to harms suffered on connecting flights, and failed to
tie those flights to the city-pairs identified by Dr. Lundgren. See Hr’g Tr. at 813:12–21 (Mar. 13,
2019) (Dr. Lundgren stating that his report covers solely city-pairs comprised of “ultimate origin
and destination of . . . flights,” “[n]one of [which] would be connecting flights, in which you first
fly to an airport that’s in between or somewhere and . . . then fly out to your ultimate
destination”); but see, e.g., Hr’g Tr. at 204:4–8 (Mar. 11, 2019) (Fry acknowledging that his
flight from Tucson to Dallas/Fort Worth was in actuality the first leg of a connecting flight); id.
at 296:12–23 (Garavanian clarifying that a large number of city-pairs provided in his written
testimony were in actuality connecting flights). Named Plaintiffs have also testified as to city-
pairs they intend to fly on in the future on a purely speculative basis with no concrete plans to do
so. See Malaney v. UAL Corp., No. 3:10-CV-02858-RS, 2010 WL 3790296, at *14 (N.D.Ca.
Sept. 27, 2010) (concluding that plaintiffs’ affidavits stating an “unformed hope of future air
travel . . . [a] speculative and de minimis injury (assuming there would be injury) [are]
insufficient to establish irreparable harm”); see also, e.g., Hr’g Tr. at 205:23–206:22 (Mar. 11,
2019) (Fry admitting that, with the exception of one flight, he had not purchased tickets or made
any concrete plans to visit any of the other roughly 33 cities he testified that he “may” travel to);
Hr’g Tr. at 787:13–20 (Mar. 13, 2019) (Stansbury stating that she had not actually booked travel
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on those routes where she was a “potential city-pair consumer”). These issues raise questions
concerning the credibility of certain Named Plaintiffs as well as their standing with respect to the
relevant city-pairs.
In sum, Plaintiffs have failed to establish a causal relationship between the Merger and
the Named Plaintiffs’ alleged harms, rendering the Named Plaintiffs’ testimony insufficient to
establish a showing of the Merger’s alleged anticompetitive impact.
iii. 	Plaintiffs’ Evidence in Summary
For the reasons set forth above and based on the entire record before the Court, the Court
concludes that Plaintiffs have not effectively rebutted Defendants’ evidence and thus, fail to
carry their ultimate burden to show that the effect of the Merger has been to substantially lessen
competition. See, e.g., Anthem, 855 F.3d at 364 (evaluating the propriety of a proposed merger
after “[h]aving considered the totality of circumstances”) (citing Baker Hughes, 908 F.2d at
984); Anthem, 236 F. Supp. 3d at 180, 258–59 (determining whether plaintiffs have “met their
ultimate burden of persuasion” based on the “entire record”); H&R Block, 833 F. Supp. 2d at 92
(utilizing a “totality of the evidence” approach to determine whether the anticompetitive effects
were a likely result of the proposed merger).
CONCLUSION
For the reasons set forth above, the Court denies Plaintiffs’ request for permanent
injunctive relief and grants judgment to the Defendants. The Defendants should settle an order
on 10 days’ notice consistent with this Decision. The proposed order must be submitted by filing
a notice of the proposed order on the Case Management/Electronic Case Filing docket, with a
copy of the proposed order attached as an exhibit to the notice. A copy of the notice and
proposed order shall also be served upon Plaintiffs’ counsel.
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Dated: New York, New York
January 29, 2021
/s/ Sean H. Lane
UNITED STATES BANKRUPTCY JUDGE
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