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Home  >  Law In Travel  >  FAA Sides With United Over Newark Airport Fees, Slams New Jersey
Law In Travel

FAA Sides With United Over Newark Airport Fees, Slams New Jersey

Matthew Klint Posted onNovember 21, 2018November 21, 2018 3 Comments

The Federal Aviation Administration slammed the Port Authority of New York and New Jersey for excessive fees at Newark Airport. The result may be cheaper airfare…or at the very least higher airline profits.

United Airlines, which operates a large hub out of Newark Liberty International Airport, noticed something. Although Newark (EWR) and Kennedy (JFK) airports are both run by the NY/NJ Port Authority, fees at EWR are 75% higher than at JFK. United also noticed the airport revenue was often diverted for non-airport projects, like roads and bridges not even tangentially connected to the airport. Thus, United filed a complaint…in 2014. Sometimes the wheels of justice turn slowly.

Finally responding to the complaint from United, the FAA agreed that the complicated web of taxes and fees at Newark are levied in a manner which is neither transparent nor reasonable. More specifically, the FAA report cited “no established, consistent, clear and fully justified method of establishing the rate base on a predictable schedule.” The report also cited several non-aviation related projects that airport fees were used for.

This issue is broader than the recent jet fuel tax increase, which also drew the ire of United. The FAA thew out the entire fee scheme, giving port authority officials a month to come up with a new (and likely lower) fee plan. As Bloomberg reports:

The FAA gave the agency 30 days to identify how much airport revenue it has diverted to other uses since 2012, adjust Newark rates and fees to reflect those amounts, modify its accounting practices, correct how it allocates costs and say how it intends to apply that revised method at Newark. The Port Authority can appeal.

United is naturally happy over the news, wisely measuring its words to only, “We are pleased to see the FAA take seriously the concerns we raised.”

CONCLUSION

Put simply, the FAA caught New Jersey with its hand in the cookie jar. While this might cause airport fees to drop at Newark, look for those savings to be remain in the pockets of airlines instead of customers. Even so, this move might slow the growth of fees and thereby also stunt rises in airfare.

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About Author

Matthew Klint

Matthew is an avid traveler who calls Los Angeles home. Each year he travels more than 200,000 miles by air and has visited more than 135 countries. Working both in the aviation industry and as a travel consultant, Matthew has been featured in major media outlets around the world and uses his Live and Let's Fly blog to share the latest news in the airline industry, commentary on frequent flyer programs, and detailed reports of his worldwide travel.

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3 Comments

  1. Justin Reply
    November 21, 2018 at 12:02 pm

    Sounds like an argument to privatize the three NY area airports… maybe by getting them to compete with each other we could get more service, cheaper fares and faster investment. London’s privatized airports aren’t great, but at least Heathrow is well into its redevelopment plan while JFK is still in early planing stages.

  2. fdryer Reply
    November 21, 2018 at 12:03 pm

    Were these excessive fees part of corruption from former governor Chris Christie’s administration, specifically those implicated, tried and jailed from the infamous Bridgegate incident?

  3. Pascal Reply
    November 22, 2018 at 9:48 am

    EWR, JFK and LGA are all managed by the exact same agency: Port Authority of New York and New Jersey (PANYNJ).

    So those differences between fees between airports are well known to that Port Authority and not separated by NJ and NY.

    What does the Port Authority say about it?

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