LOS ANGELES WORLD AIRPORTS, LAX TWO CORP. REACH SETTLEMENT ON LITIGATION FOR TERMINAL 2 AT LOS ANGELES INTERNATIONAL AIRPORT

            The Los Angeles Board of Airport Commissioners today approved a settlement agreement among Los Angeles World Airports (LAWA); LAX Two Corp.; Delta Air Lines, Inc. for itself and as successor to Northwest Airlines, Inc.; Hawaiian Airlines, Inc.; and Air Canada regarding a lawsuit pending in the United States District Court for the Central District of California in Northwest Airlines, Inc. v. City of Los Angeles concerning the lease with LAX Two Corp. for Terminal 2 at Los Angeles International Airport (LAX). 

            Under the terms of the settlement agreement, LAWA will pay approximately $29 million to LAX Two Corp.  LAX Two Corp. will redeem approximately $88.7 million in outstanding principal of bonds that were issued to finance the construction in Terminal 2 at LAX, and LAWA will refund LAX Two Corp. for such redemption amount.  The parties also agreed to dismiss the litigation. 

            In exchange for LAWA’s payment of the settlement and bond redemption amount, LAX Two Corp.’s lease for Terminal 2 will be terminated.  LAWA will then enter into eight-year leases for Terminal 2 with Air Canada and Hawaiian Airlines, Inc., respectively.  LAWA also will enter into a short-term agreement with LAX Two Corp. for the management of Terminal 2.  

            The settlement agreement is contingent upon approval of the Hawaiian Airlines and Air Canada leases by the Los Angeles City Council.