The FAA has issued a preliminary finding that the Port
Authority of New York and New Jersey improperly allocated fees paid by airlines
at Newark Airport to non-aviation projects.
In addition to violating rules that apply to airports accepting
federal grants, the port authority failed to be transparent in the method it
used to establish fees.
As a result of the Nov. 19 ruling, which stemmed from a 2014
case filed by United Airlines, the FAA has ordered the port authority to submit
a corrective plan within 30 days that transparently lays out how Newark Airport
allocates its costs. The plan must also identify the amount of money that the
port authority improperly diverted from Newark between 2012 and 2018. The port
authority must reduce its charges at the airport to reflect its newly
calculated costs.
The port authority says it will appeal the ruling.
"The FAA has now issued an initial agency determination
on United's 2014 complaint as to certain Port Authority financial and
accounting practices from 1995 to 2014," the agency said in an emailed
statement. "This does not constitute a final agency decision."
According to the order, between 2009 and 2014 Newark Airport
generated surplus revenues of $1.35 billion, or 28.6% higher than expenses.
That was higher than the surplus revenues at New York's Kennedy and LaGuardia
airports (both operated by the Port Authority of New York and New Jersey) in
total dollars and by percentage.
The order, which was signed by FAA director of airport
compliance and management analysis, also states that the port authority
improperly budgeted $241 million in Newark Airport revenue in 2014 for work on
the Pulaski Skyway highway project and the Wittpenn Bridge in New Jersey.
The port authority contends that those revenue diversions
were allowed under a grandfather clause within the federal Airport Improvement
Program grant program, but the FAA rebuffed that argument.
In a statement, United struck a conciliatory tone about the
ruling.
"We are pleased to see the FAA takes seriously the
concerns we raised," the carrier said in an email. "We look forward
to continuing our important work with the port authority in pursuit of our
shared goal: better service for our customers at Newark Liberty International
Airport."