The Federal Aviation Administration has ruled in favor of United Airlines’ complaint in a 2014 lawsuit against the Port Authority of New York and New Jersey alleging the port charged “unreasonable rates using a fee methodology that is not cost-based and lacks transparency” at Newark Liberty International Airport.
United filed the lawsuit in December 2014 alleging the port “generated excessive surplus revenues in order to subsidize non-aeronautical functions and improperly divert airport revenue.”
The port denied United’s allegations, asserting “the flight fees are not unreasonable or unjustly discriminatory,” according to the lawsuit. The port claimed Newark Liberty International Airport is a grandfathered airport that allows it to use airport revenue for “non-aeronautical purposes.”
The FAA ruled Monday the port’s actions violated economic nondiscrimination based on the port’s “deficient accounting practices, poor record keeping, associated procedures and lack of transparency in setting rates and charges.”
The port was directed by the FAA to submit a corrective action plan within 30 days describing how it will comply with cost methodology, modify its accounting practices, establish an acceptable grandfathering methodology to be used in 2019 and identify the total amount of diverted airport revenue from 2012 to 2018.
The FAA said if the port “fails to submit a corrective action plan acceptable to the FAA within the time provided … the director may initiate action to revoke and deny applications for airport improvement project grants.”
The port may appeal the FAA decision within 30 days.