DOT and FAA Airport Legal Determination and Opinion Letter Abstracts of 2023 (2025) / Chapter Skim
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United Airlines, Inc. v. Port Authority of New York and New Jersey No. 16-14-13
United Airlines, Inc. v. Port Authority of New York and New Jersey No. 16-14-13
Pages 15-21
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From page 15... ...
Holding: Affirming in Part and Remanding in Part: Violation of Grant Assurance 22, Economic Nondiscrimination Violation of Grant Assurance 25, Airport Revenues Order to Submit Corrective Plan Abstract: United Airlines (United) filed a Part 16 Complaint alleging that the Port Authority of New York and New Jersey (Port Authority)
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From page 16... ...
1718.) Moreover, the Director found that the sponsor was in violation of Grant Assurance 22, Economic Nondiscrimination, by virtue of deficient accounting practices, poor record-keeping, associated procedures, and lack of transparency in setting its rates and charges, which were not consistent with the DOT/FAA Policy Regarding Airport Rates and Charges.
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8.) Limiting Grandfathered Diversion of Airport Revenue to Facilities Owned and Operated by Port Authority As to the first issue, the Associate Administrator decided that grandfather rights were limited by the terms of a statutory exception and that grandfathered diverted revenue may only be used to support facilities that the Port Authority owned or operated.
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From page 18... ...
12.) Having held that the statutory requirements to grandfathered status were met and that they defined the scope of such rights, the Associate Administrator then, on the basis of fundamental principles of statutory construction, upheld the Director's finding that the grandfather rights at issue did not include the right to divert revenue to facilities not owned and operated by the Port Authority, i.e., the Associate Administrator held the qualifying statutory language "law controlling financing" requires that airport revenue "be used" to support "not only the airport" but the "other facilities of the owners or operator," a phrase that itself means facilities that the Port Authority owns.
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From page 19... ...
21.) Ultimately, the Associate Administrator concluded that the Port Authority's failure to cooperate with legitimate inquiries from United; failure to periodically analyze and true-up markups to actual costs; and admitted inability to validate cost recovery markups of the EWR flight fee constituted substantial evidence supporting the Director's finding of an insufficiently transparent rate-setting methodology.
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From page 20... ...
§§ 47107 and 47133, as well as Grant Assurance 25. As such, the Associate Administrator's decision affirmed the Director's decision that to the extent grandfather rights existed, they did not allow for the expenditure of airport revenue to support facilities that the Port Authority did not own or operate.
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From page 21... ...
§ 40116; 49 U.S.C. § 41713; Accounting Practices; Air Carrier Access; Airline Deregulation Act; Airport and Airway Improvement Act; Anti-Head Tax Act; Audit Trail; Corrective Action Plan; Cost Allocation Methodology; Fee Methodology; Grant Assurance 22; Economic Nondiscrimination; Grant Assurance 25; Airport Revenues; Grandfathered Airport; Grandfathered Diversion; Policy and Procedures Concerning the Use of Airport Revenue; Policy Regarding Airport Rates and Charges; Record Keeping; Revenue Diversion; Standing; Surplus Revenue (Excessive)
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