Decision Protects Air Carrier Rights to Choose Their Own Ground Handlers
In a decision with far-reaching implications for competition and fairness in airport operations, the Federal Aviation Administration (FAA) has issued a Notice of Potential Noncompliance against the Port Authority of New York and New Jersey for policies that unlawfully restrict air carriers’ ability to select their own ground handling service providers at John F. Kennedy International Airport (JFK).
The FAA’s October 7, 2025, determination concluded that the Port Authority’s limitations on the number of ground handlers allowed at JFK terminals—currently capped at one in Terminal 1 and two in Terminals 4 and 7—appear to violate Grant Assurances 22 and 23, which require airports receiving federal funds to operate on a nondiscriminatory basis and prohibit the grant of exclusive rights.
According to the FAA, the Port Authority and its terminal operators must submit a Corrective Action Plan within 90 days to:
- Permit additional independent ground handlers at each terminal;
- Demonstrate compliance with federal grant assurances; and
- Ensure that terminal-imposed fees and conditions on ground service providers are reasonable and nondiscriminatory.
Failure to comply may result in formal enforcement proceedings and potential loss of federal airport improvement funding.
Legal Implications
The FAA’s decision is a major victory for fair competition, and every air carrier operating at JFK will benefit from the determination. The FAA reaffirmed that every air carrier has a federal right to select its own qualified service providers—without interference from terminal operators or airport management. This decision ensures a level playing field and protects smaller, minority-owned service companies from exclusion at one of the nation’s busiest international airports.
Steven M. Taber, aviation law attorney and partner at Leech Tishman Nelson Hardiman, represented MSN Air Service, Inc., the complainant in the case. The decision arose from MSN Air Service’s long-standing complaint that the Port Authority’s system of “approved handlers” and terminal-level access restrictions unlawfully limited market entry by independent and minority-owned ground service firms, reducing competition and raising costs for airlines.
The FAA’s finding signals a broader message to airports nationwide: airport proprietors and terminal managers cannot contract away or curtail the rights of air carriers guaranteed under federal law.
For more information about this matter or aviation grant assurance compliance, contact Steven M. Taber.
Steve is a Partner and Leader of Leech Tishman’s Aviation & Aerospace Industry Group. Steve is based in the Los Angeles office and can be reached at staber@leechtishman.com or 626.395.7300.