| FOR IMMEDIATE RELEASE
THURSDAY, JULY 3, 2008
TDD (202) 514-1888
JUSTICE DEPARTMENT REQUIRES DIVESTITURE IN
Divestiture Will Preserve Competition for
WASHINGTON — The Department of Justice announced today that it has reached a settlement that will require Signature Flight Support Corporation (Signature) to divest assets used to provide flight support services at the Indianapolis International Airport in order for Signature to proceed with its acquisition of Hawker Beechcraft's flight support services business. The Department said that the transaction, as originally proposed, would have combined the only two providers of flight support services to general aviation customers at Indianapolis International Airport and would have substantially lessened competition, resulting in higher prices and reduced service and innovation. These flight support services are also referred to in the industry as fixed base operations (FBOs).
The Department's Antitrust Division filed a civil lawsuit today in U.S. District Court for the District of Columbia to block the proposed transaction. At the same time, the Department filed a proposed settlement that, if approved by the court, would resolve the Department's competitive concerns and the lawsuit.
"This divestiture is necessary to preserve competition for general aviation customers at the Indianapolis International Airport," said Thomas O. Barnett, Assistant Attorney General in charge of the Department's Antitrust Division.
The proposed settlement requires the divestiture of either Signature or Hawker Beechcraft's FBO assets at Indianapolis International Airport to a buyer approved by the Department's Antitrust Division. Such a divestiture would assure continued competition for FBOs at that airport. FBOs provide fuel and related support services to general aviation customers, which include charter, private, and corporate aircraft operators. According to the complaint, the proposed transaction would have resulted in a monopoly in the market for FBO services at the Indianapolis International Airport. The loss of competition would have resulted in higher prices and decreased quality of service to general aviation customers at the airport.
Signature, headquartered in Orlando, Fla., is the largest owner and operator of FBOs in the United States, with facilities at more than 45 airports nationwide. Signature's 2007 revenues from its U.S. FBOs were approximately $600 million.
Hawker Beechcraft, headquartered in Wichita, Kan., has FBOs at seven airports in the United States, all of which will be sold to Signature as a result of the acquisition. Hawker Beechcraft's 2007 revenues for its FBOs were approximately $73 million.
As required by the Tunney Act, the proposed settlement, along with the Department's competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Donna N. Kooperstein, Chief, Transportation, Energy, and Agriculture Section, Antitrust Division, U.S. Department of Justice, 450 5th Street, NW, Suite 4100, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed final judgment upon finding that it is in the public interest.