Battle of New York

"And there's one other person you pissed off... his name is Phil."

- Iron Man

The Battle of New York was a major battle between the Avengers and Loki with his Chitauri army in Manhattan, New York City. It was, according to Loki's plan, the first battle in Loki's war to subjugate Earth, but the actions of the Avengers neutralized the threat of the Chitauri, before they could continue the invasion. The Avengers were inspired to fight by Phil Coulson's apparent death, although this may have been manufactured by Nick Fury.

Background
Loki returns from a different dimension two days before the battle to take the Tesseract, with help from Thanos an the Other. He teleports to the Project P.E.G.A.S.U.S. S.H.I.E.L.D facility. He takes control of the minds of Clint Barton for his fighting skills and Erik Selvig for his knowledge of the Tesseract. Loki, Barton, and Selvig escape as the portal Loki arrived in collapses and destroys the facility. Nick Fury tells the rest of the organization known as S.H.I.E.L.D. that a war had just begun. He also thought that it was finally time to initiate the Avengers Initiative, a plan to recruit Earth's mightiest for a team called the Avengers. Fury goes to get Steve Rogers (Captain America), sending Natasha Romanoff to get Bruce Banner (Hulk), and Phil Coulson to get Tony Stark (Iron Man).

Later that day, Loki goes into a gallery to create a distraction and retrieve a scan of an eye for Barton, while Barton steals iridium to stabilize the Tesseract. S.H.I.E.L.D sends in Steve rogers to stop Loki, and when the civilians have cleared the area, send in Tony Stark in his Mark VI armor. Loki surrenders and lets them take him into custody. On the way back to the Helicarrier, Thor comes and takes Loki. Thor tells Loki that he traveled from Asgard to get him. While Thor is talking, Iron Man attacks Thor for taking Loki from them. Iron Man and Thor fight, but Captain America stops them. Thor becomes an ally and a member of the team.

The next day, the team gathers at the Helicarrier.As Tony Stark and Bruce Banner work on finding the Tesseract, Loki waits in his glass prison for the team to come into conflict, while Selvig finishes the portal machine using the Tesseract and the iridium, and starts setting it up on Stark Tower. Tony plants a device on the bridge to hack into all of S.H.I.E.L.D's secure files. He tells Steve about his suspicions that they are being deceived, and Steve, now suspicious himself, investigates a storeroom. Romanoff goes to Loki's cell to interrogate him, finding out that Loki intends to create chaos on the ship by triggering Banner to become the Hulk. As Steve, Bruce, and Tony all come to the conclusion that S.H.I.E.L.D was using the Tesseract to create an arsenal, the team begins to argue in the lab. Barton and a group of enemies of S.H.I.E.L.D. attack the Helicarrier, destroying one of the rotor blades, and triggering Banner to become the Hulk, and chase Natasha.As Captain America and Iron Man try to fix the broken rotor blade, Thor saves Natasha from the angry Hulk. When Hulk is distracted by an attacking plane, he rips the plane apart, letting the pilot barely survive. The plane explodes and Hulk falls away the Helicarrier. Iron Man and Captain America barely succeed at fixing the rotor blade. Thor goes to see if Loki is still in his custom made prison, but is tricked into the prison by Loki. Phil Coulson came to save Thor with the gun made from the Destroyer's body. Loki tricks Coulson and stabbed him in the back. Natasha finds Barton, who she was good friends with before Loki controlled him. Natasha fights Barton and knocks him out, which put him out of Loki's control.

Loki releases the prison with Thor inside, sending Thor hurtling toward the ground hundreds of feet below. Thor barely makes it out of the prison before it shatters on sharp rocks, and Thor ends up in an empty field. Hulk lands in an abandoned warehouse. Dr. Banner wakes up in the warehouse, where only one worker was present. The worker gives Bruce some clothes and a motorcycle. Loki escapes while his allies fight the S.H.I.E.L.D. agents.

Phil dies trying to say that the team would never be able to unite without something to motivate them. Nick Fury takes this advice to heart, and manipulates Tony and Steve into working together. As Tony talks to Steve, he works out Loki's motivation to goad the Avengers into fighting him in New York in front of the world, so that Loki and his army can be seen defeating Earth's heroes. Barton regains consciousness and talks to Natasha about the possibility of going after Loki. Captain America comes in and tells them to suit up for the battle, and the four of them set a course for Manhattan.

Battle
Tony Stark arrives at Stark Tower where Loki is planning to open the portal to unleash his army of Chitauri. Stark fires his repulsor beams at the Tesseract, but it is protected by an impenetrable energy shield. With his armor damaged, Stark chooses to have his armor removed and stall Loki to buy time for his new armor to be prepared. While Stark threatens Loki, he puts on a set of bracelets which will allow him to connect to the new Mark VII armor. He tries to use his scepter to take control of Tony's ind, but the arc reactor in Tony's chest stops the blade. Frustrated, Loki throws Tony out the window, but Tony's Mark VII armor deploys and forms on Stark just before he hits the ground. Flying back up, Stark blasts Loki in the name of Phil Coulson, but the Tesseract, in conjunction with the device Selvig built, opens a portal to bring his army of Chitauri and Leviathans.

Stark flies toward the invading Chitauri and opens fire, destroying several of them. Thor arrives at Stark Tower and threatens Loki to turn off the Tesseract. Loki refuses, and the two fight on the tower as more Chitauri arrive. In a Quinjet, Hawkeye, Black Widow, and Captain America fire on several Chitauri before being shot down by Loki, who then jabs Thor with a small dagger before fleeing on a Chitauri chariot. On the streets, the NYPD fires on the invading army to no effect, as Cap, Hawkeye, and Romanoff fight the army on the streets while protecting as many civilians as they can. After some fighting, Banner arrives, and Stark leads a Leviathan towards him. Banner transforms into the Hulk and destroys it with Stark's help.

For the first time, The Avengers stand united, ready to defend New York City. Loki orders his army to "send the rest." Cap assumes command: he details Hawkeye to take a high vantage point and call out attack patterns and strays; Stark will maintain air superiority against the Chitauri; Thor can use his lightning to bottleneck the portal; Cap and Romanoff are to keep the fighting on the ground, and Hulk only gets one word, "Smash," and quickly attacks any and all targets of opportunity. Though the Avengers are more than capable of fighting the invasion, Romanoff knows they need to close the portal in order to win. With Cap's help, she jumps onto a hovercraft to make her way to the portal. Hawkeye targets Loki with an arrow, which he catches, but it explodes, causing him to crash at the top of Stark Tower. The Hulk arrives and beats Loki into submission. Unfortunately, the Chitauri continue to invade and begin to wear the Avengers down.

Now free of Loki's control, Selvig tells Romanoff that he had enough control to build a failsafe into the portal device which could shut it down using an energy just like it, which means they can use Loki's spear to close the portal.

Meanwhile, Fury's superiors, the World Security Council, order Fury to launch a nuclear missile at New York City to end the invasion, but Fury refuses the order. The Council orders a jet launched anyway, so Fury orders Stark to intercept the missile and takes it through the portal toward the Chitauri fleet. The missile detonates, destroying the invaders' mothership and leaving their forces disabled on Earth. Stark's suit runs out of power and he falls back through the portal just before Romanoff closes it. Hulk catches Stark in mid-fall and he survives. The Avengers are victorious.

Aftermath
After the fight, the Avengers went to Stark Tower to capture the injured Loki. They take him into custody. The team later ate at a shawarma restaurant. James Rhodes, who was busy fighting against the Ten Rings terrorist group on the other side of the world, soon joins them, too late to have any effect in the battle.

Various news sources report the Chitauri invasion and the Avengers' victory, and there is a widespread feeling of gratitude toward the superhero team.

Later, the team meets in Central Park to send Loki, Thor, and the Tesseract back to Asgard. The rest of the team go their separate ways. Tony and Bruce leave together, Steve leaves on the motorcycle Hulk brought, Clint and Natasha leave together, and Thor leaves with Loki and the Tesseract.

Later, the Other tells Thanos that the Chitauri failed, and tries to excuse himself by saying that to challenge the humans is "to court death", to which Thanos simply smiles.

The extensive repairs cost New York $160 billion dollars.