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Hemmer wishes for Stanton, as the first war hero of the campaign, to lead the assault on Terra. Stanton, however, continues to express his reluctance about attacking the peaceful natives, stating that there must be alternatives. Hemmer informs Stanton that the damage to the Ark is so severe that the ship only has two months' worth of oxygen remaining, and that action must be taken. Hemmer's plan is to take the main terraforming unit that produces air on the Ark—a large, spider-like mechanism—and implant it onto the surface of Terra. Enough breathable air will remain on the Ark to last a few weeks, but within one week, the terraformer will convert the entire atmosphere of Terra to an oxygen-based one, making the planet habitable for humans. If the plan works, mankind will have a new home; if it doesn't, the entire human race will die out. The consequence of this plan, however, is that all the native life on Terra, to which oxygen is poisonous, will be destroyed. To test Stanton's loyalties, Hemmer shows him a room that has been pressurized with Terranian atmosphere, and in which Mala has been imprisoned. Hemmer then has Stewart thrown into the chamber, and he quickly begins to suffocate as Mala panics and pleads for someone to help him. Stanton can press a button to fill the room with oxygen and save Stewart's life, but doing so will kill Mala. Stanton hesitates, but presses the button; as Mala begins to choke, he covertly orders Giddy to save her. Giddy uses a laser to cut through the window into the chamber, causing it to depressurize; the resulting explosion knocks out the humans present and allows Giddy to retrieve Mala's respirator. Mala initially believes that Stanton has betrayed her, and quickly flees back to his fighter. With Giddy's assistance, she is able to pilot the fighter away from the Ark, although the ship's defenses shoot her down, and she is forced to eject after entering the atmosphere. Mala falls a long distance to the ground, and loses consciousness.
Aboard the Ark, Stanton explains Giddy's actions as a malfunction, an explanation of which Hemmer is suspicious, but is willing to accept. He orders Stanton to take part in the "terraforming campaign" on the planet. Stewart apologizes for what happened with Mala, claiming that Hemmer said it was the only way they could be sure of Stanton's loyalties. Stanton tells his brother that he will always look out for him, but that he should question if Hemmer will do the same. On Terra, Mala awakes to find herself in the company of Senn and Orin in the same complex that she and Stanton discovered earlier. Orin explains that long ago, the people of Terra made war upon each other, and almost destroyed their entire species. A small group of survivors formed the Elders, who resolved to make the future a peaceful one by keeping the past a secret and forbidding any knowledge of advanced technology. Now, however, with the Earth Force invasion imminent, that ban is being lifted; Mala sees the Terranians' simple wooden gliders being replaced by sleek metal warships with advanced laser weapons. Mala asks where Giddy is, and is told that he is being held captive; although Orin cannot release him, because he is a "tool of the enemy", he will allow Mala to speak with him. Terranian technicians wish to "dissect" Giddy in order to learn his knowledge of the humans' battle plan, but Mala says they should simply ask him instead. Giddy claims that even though Stanton ordered him to protect her, he cannot act against Earth Force because they created him. Realizing that Stanton never betrayed her after all, Mala asks Giddy if he intends to disobey Stanton's order; without his assistance, Earth Force will kill everyone on Terra, including her. Giddy puzzles over Mala's logic, but agrees to help. Both sides prepare for war; Earth Force orchestrates the defense of the terraformer while Giddy reveals its weak points to the Terranians.
The terraformer is launched to the planet's surface and immediately begins producing oxygen. The battle begins and the fighting is fierce, with casualties on both sides. Earth Force, having expected to encounter only primitive weapons, is unprepared for the Terranians' more advanced fighters. Following Giddy's instructions, the Terranians attack the air filters on the terraformer, reducing its ability to create oxygen. In response, Hemmer orders the oxygen production process to be accelerated; although hazardous, this will speed up the rate of atmospheric conversion from days to minutes. More and more of the terraformer's filters are damaged, and the battle briefly tilts in favor of the Terranians before Earth Force reinforcements arrive from the Ark. As the terraformer produces more and more oxygen and begins to poison the nearby Terranian city, Mala witnesses Senn's ship shot down by a human fighter and pursues it in a rage; she realizes that the pilot is Stanton's brother Stewart, but does not stop her attack. Stanton himself joins the battle, feeling he has no choice, and responds to Stewart's distress call, but freezes upon seeing the attacker is Mala. Unwilling to either abandon his brother or kill his friend, Stanton takes his only option, interposing his ship between theirs and launching his missiles at the terraformer. The resulting explosion destroys the terraformer as it is on the verge of completing the atmospheric conversion. Both Hemmer and Stanton are killed in the blast, while Mala and Stewart barely escape. With the terraformer destroyed, the remaining Earth Force ships retreat back to the Ark; the battle for Terra is over, and the humans have lost.
In her village, Mala joins in the victory celebration, learning that Senn survived the crash of his ship. Orin credits her with winning the battle, but Mala says it was Stanton's actions that saved them all. Mala is relieved that her people have survived, but is also saddened by the plight of the humans; she dejectedly notes that without any food, water, or air, they can do nothing but wait to die. However, Orin reminds her that there are always other options. Some time later, Mala and Senn are seen flying above the clouds once more, as they were at the beginning of the film; this time they are joined by Stewart, piloting an Earth Force fighter, who offers Mala a salute before flying through a hatch in a massive dome similar to the oxygen tent Mala constructed for Stanton. It is here that the humans from the Ark have established a new colony, using Terra's oxygen-producing plants and opening diplomatic relations with the native Terranians; Orin is seen meeting with President Chen. Stewart flies high above the budding colony, observing a statue that is still under construction: it is a memorial to his brother, who is being remembered as a true hero.
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