VIA FEDERAL EXPRESS
October 17, 2005
Robert Span, Esq. Paul, Hastings, Janofsky & Walker LLP 515 South Flower Street 25 1 h Floor Los Angeles, CA 90071-2228
Re: EWRRates and Charges
DearMr. Span: 

# ~PORTAln1iORITYOF NY& NJ

DarrellBuchbtrtder, General Counsel Carlene II. Mcintyre, Chiet Opinions andAppeals Division


# RECEIVED OCT 18 2005 

# PAUl HASTINGS

Mr. Buchbinderhas referred your letter ofOctober 11, 2005 to me for aresponse. Your correspondenceincludes a detailed request for infonnation, which you indicate you need to evaluate Newark Liberty Airport ("EWR") rates and charges onbehalfofContinental Airlines ("Continental").
Before moving to ourresponse to yourrequest, let me address some ofthe statements in your letter about the Port Authority's obligation under federal law governing aeronautical rates and charges since your letter does not address somekeypoints, which Ihope you will agree, are particularlyrelevant to yourinquiry.
You malce reference to federal law, which "requires that aeronautical rates and charges be fair and reasonable, and calculated in aconsistent and transparent marmer." As you know, that policy also states a strongpi·eference that airports and airlines negotiate with each other and reach agreement on rates and charges. Itis significant, therefore, that the rates and charges which are the subject ofyour inquiry are the result of just such negotiation between Continental and the Port Authority, and the resulting agreement contains formulas and amethodology for the computation ofthose fees which was agreed to by both parties. Moreover, to the extent you question any net surplus earned at EWR as awhole and seek infmmation aboutnon-aeronautical revenue, including the expenditure ofany net revenue, it is important to note that the federal rates and charges policy does notregulate the level offees charged to non-aeronautical users ofairport facilities, andthat, absent agreement, aeronautical users are simplynot entitled to share inrevenues generated from non-aeronautical sources. I refer you to the recent Instituting Order issuedby the Department ofTranspmiation in the proceeding by the airlines at Terminal B, which fully sustained this principle with regard to EWR (DMS website, Docket 20407). Accordingly, all financial information to be shared with Continental will be limited to that needed to understand the rates and charges as governed by the tenus ofthe agreement.

EXHIBIT SS 225 ParkAvenue South, 13th Floor New York, NY I 0003 T: 212-435-3503 

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# ILet me assure you that we are closely examining your request and that we will be providing you with info1mation which we hope will bring Continentalto an understanding that the EWRrates and charges computations are fully consistent with the agreement. However, in order to streamline thisprocess, let me recommend that you review the info1mation that will be supplied at the upcomingFinance Subcommittee of the Airline AirportAffairs Committee on Tuesday, October 18, 2005. The agenda for that meeting, which was prepared by a Continental representative, as chairman ofthe airline users group, is attached. After you have had an opportunity to take a look at the informationprovided to the airlines atthat meeting, ifthere is any additional information you require, please so inform me and include inthatrequest areference to those sections ofthe agreement which relate to your request.
As you mayknow, next Tuesday's meeting is part ofaprocess whereby Continental, along with all other airlines, which operate atNewark, receives information related to the state ofthe airport on a semi-annual basis through the Airline Airport Affairs Committee. The informationprovided at these meetings includes airport cost components and provides ayear-to-year comparison so that variances can be identified and reasons for variances discussed. Inthe EWR financial part ofthepresentation, rate components are identified. These are the flight fee, the monorail fee, the airport service factor, phase 1 A and the Centralheating charge, police costs and the fuel fee. The significant cost components ofthe rate categories arc identified and the meeting is open to questions.
Airlines are requested to provide their weight estilnates for the following period so rate

. estimates can be forecasted with as much precision as possible. The meeting ends with an opening to questions. Ifanswers to specific questions are notreadily available, staffgets back to those airlines that require additional information.
I look forward to our future communication and I am certain that we canresolve auy concerns Continental may have regarding these matters.

# {~ 

# /1

# fo**~:Hr.r'h.pl;~** Carlene V. Mcintyre



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