1. 0 icfi.com/aviation | Benefits to DFW Airport, Metroplex Consumers and the State of Texas Proposed AA/US Airways Merger November 7, 2013 Prepared for: Dallas Fort-Worth Airport

2. 1 icfi.com/aviation | American Airlines (AA) and US Airways (US) announced plans to merge on February 14, 2013 BACKGROUND  The merger would create a network airline comparable in size and domestic market share to Delta and United, each of which completed mergers in the past five years Delta Airlines merged with Northwest in 2008 United Airlines merged with Continental in 2010  Both of these previous mergers, and a subsequent merger between Southwest Airlines and AirTran, were cleared by the US Department of Justice (DOJ)  However, the DOJ along with the District of Columbia and seven U.S. States* filed a complaint to permanently block the AA/US merger in August 2013, citing anti- competitive concerns  The purpose of this briefing is to review the expected benefits that an AA/US merger could produce for DFW Airport, Metroplex consumers and the State of Texas * These States are Arizona, Florida, Pennsylvania, Tennessee, Michigan, Virginia and Texas. Texas has since withdrawn from the action.

3. 2 icfi.com/aviation | DFW will be the largest hub, headquarters location, and a strategic priority for the merged AA/US  Large and vibrant domestic and international market  Key international gateway  Strong business climate  Lack of significant physical or economic constraints  Large and vibrant domestic and international market  Key international gateway  Strong business climate  Lack of significant physical or economic constraints DFW’s Strategic Attributes

4. 3 icfi.com/aviation | As the leading hub in the AA/US system, DFW’s strong demographic profile will generate sustained growth  Ranks 2 nd only to Atlanta among U.S. connecting hubs  Serves the 4 th largest U.S. metro population at 6.7 million Larger than either Atlanta or Houston Only New York, Los Angeles, and Chicago are larger  4th fastest growing market among the 20 largest U.S. metro areas over the past decade  Ranks 6 th on domestic O&D passengers; 4 th on domestic O&D passenger revenues DFW’s Market Strengths

5. 4 icfi.com/aviation | Previously approved mergers positioned Delta and then United as the largest U.S. airline – the merged AA/US will be similarly sized Top U.S. Carriers by RPMs Note: Regional carriers shown separately. Source: DOT Form 41 Reports Before DL/NW merger Before UA/CO merger, Post DL/NW merger (merged October 2008) Post UA/CO merger (merged August 2010), Before AA/US merger CY 2008CY 2010 YE 2Q 2013

6. 5 icfi.com/aviation | The development of ATL and IAH after previous airline mergers indicates that DFW should lead network expansion for AA/US  Post-merger, Delta increased hub capacity at ATL - its largest hub  And United grew service at IAH - its largest hub - and San Francisco (a primary international gateway) through 2012  Similar to ATL and IAH, DFW will grow as the largest hub in the combined AA/US route network Change in DL/NW Daily Seat Departures at ATL March 2008, 2010 and 2013 Change in UA/CO Daily Seat Departures at IAH March 2010, 2012 and 2013 Source: OAG Schedules Note: The drop in United’s Houston capacity during the past year may reflect, in part, its response to a dispute with the City of Houston over Southwest’s Airline’s successful initiative to provide future international services at Houston Hobby

7. 6 icfi.com/aviation | Leadership in global trade requires a competitive AA/US and oneworld alliance at DFW  In 2012, worldwide Texas exports were $265 billion - up 9% vs. 2011  In 2012, Texas exports accounted for 17% of the U.S. total  International trade (exports/imports) supports 2.9 million or 1 in 5 Texas jobs Foreign-owned companies employ 428,000 Texas workers Trade related employment grew 12% vs. total Texas job growth of 6% from 2004 to 2011 Future economic growth and jobs for the DFW/Metroplex, Texas and America increasingly depend on expanding U.S. trade and investment opportunities in the global marketplace Texas Trade is Expanding Rapidly Source: U.S. Department of Commerce, U.S. Census Data 2012; Business Roundtable, David Thomas

8. 7 icfi.com/aviation | New service Existing service as of Oct 2012 Nov 2013 June 2014 The AA/US merger will directly help DFW achieve its full international growth potential American’s new Shanghai, Hong Kong, Seoul, Bogota, and Lima nonstops are precursors of a logical DFW international growth strategy for a merged AA/US The merger will create additional DFW international growth opportunities to new markets in Central and South America and Asia Nov 2013

9. 8 icfi.com/aviation | Source: OAG Schedules “Our negotiations confirm that (American) will…maintain important routes in Texas…” -- Greg Abbott, Texas Attorney General American’s commitment to DFW’s Texas regional markets is evidenced by AA’s schedule stability from 2010 to 2013 AA’s DFW Regional Markets Weekly Departures and Seats at AA’s DFW Regional Markets October 2010 and 2013

10. 9 icfi.com/aviation | A strengthened merged airline and DFW hub will produce significant benefits for consumers and businesses in the DFW Metroplex  The merged AA/US will create and sustain leading global connectivity for the DFW/Metroplex, facilitating the movement of people and goods  Network expansion will result in a greater diversity of nonstop services, including both domestic and international routes, with more frequent and convenient schedules  A financially stable and revitalized airline will enhance job security for the 25,000 AA/US employees in Texas  DFW’s status as the merged airline’s largest hub will benefit the DFW/Metroplex in attracting new and relocating companies, with positive effects on employment and income

11. 10 icfi.com/aviation | The DFW market is already highly competitive – LCCs now provide nonstop service in 17 of the top 20 DFW domestic markets… Note: O&D to/from DFW Airport only; LCC service includes competitive DAL airport service by Southwest Source: US DOT, O&D Database, Database Products Inc and OAG Schedules

12. 11 icfi.com/aviation | …and LCC competition will increase significantly when the Wright Amendment expires in October 2014 Potential New Southwest Destinations After the Wright Amendment Expires Source: “The Wright Amendment Consumer Penalty,” Cambell-Hill Aviation Group, June 2005; ICF-SH&E analysis.

13. 12 icfi.com/aviation | Conclusion  The proposed AA/US merger will create a stronger competitor to United and Delta, and their respective global alliances  As the leading hub in the combined carrier network, DFW is positioned to grow following an AA/US merger  A strong and growing DFW hub provides critical support to the DFW Metroplex and cities across the state  The DFW market has significant LCC competition today, and this competition will increase when the Wright Amendment expires in October, 2014  The AA/US merger will benefit DFW Airport, consumers and businesses in the Metroplex region, and the State of Texas

14. 13 icfi.com/aviation |