BEFORE THE 

FEDERAL AVIATION ADMINISTRATION 

WASHINGTON, D.C. 

--------------------------------------------------------------------- 

 : 

UNITED AIRLINES, INC., : 

: 

 Complainant, : 

 v. : Docket FAA-16-14-________ 

 : 

THE PORT AUTHORITY OF NEW YORK : 

AND NEW JERSEY, : 

: 

Respondent. : 

---------------------------------------------------------------------: 

EXPERT REPORT OF DANIEL M. KASPER
I. IDENTIFICATION

1. I am a Senior Consultant for Compass Lexecon. I have over 30 years of consulting 

experience at Compass Lexecon, LECG, Coopers & Lybrand, L.L.P., and 

Harbridge House, Inc. My work has dealt extensively with issues involving 

economics, finance, and competition involving airlines and airports, among other 

economic sectors. I have also served for a total of ten years on the faculties of the 

Harvard Business School and the University of Southern California School of 

Business Administration. 

2. Between 1979 and 1983, I served at the United States Civil Aeronautics Board 

(“CAB”), first advising the Vice-Chair of the Board on all matters pending before 

the agency and then as the Director of International Aviation. In the latter 

capacity, I was the Board’s primary advisor and chief line officer for all matters 

involving international aviation. 

3. In 1993, I was one of 15 members of the National Commission to Ensure a Strong 

and Competitive Airline Industry, a body created by Congress and appointed by 

the President and the Congressional leadership to evaluate and make 

recommendations on how to improve the performance of the U.S. airline and 

aerospace industries. In addition, I have served as a consultant to the U.S. 

Departments of Transportation, State and Defense on various aviation industry 

matters, and have also testified as an expert on airline and aviation industry matters 

—including airport rates and charges—before courts and federal administrative 

agencies, as well as legislative bodies and antitrust authorities both in the United 

States and abroad. I earned my M.B.A. and J.D. degrees from the University of 

Chicago. My curriculum vitae is attached to this report as Appendix A. 

4. I have been retained by Steinbrecher & Span LLP, counsel for United Airlines, 

Inc. (“United”) to provide an independent economic analysis of whether the Port 

Authority of New York and New Jersey (“Port Authority”) has monopoly power 

over airlines in the provision of airport facilities in New York City metropolitan 
2 

area. I have also been asked to compare the airport access fees charged by the Port 

Authority to airlines at Newark Liberty International Airport (“EWR”) relative to 

other large New York City area airports it manages (specifically LaGuardia 

Airport (“LGA”) and John F. Kennedy International Airport (“JFK”)) as well as 

other major U.S. airports, and to provide an independent analysis of whether the 

disparity in airport charges at EWR vis-à-vis these other New York City airports 

places United at a competitive disadvantage versus other U.S. airlines. 

5. This report contains my opinions as well as the bases for those opinions. In 

preparing this analysis, I have been assisted by economists on the staff of Compass 

Lexecon. The opinions set forth in this report are based upon my review and 

analysis of: (i) relevant articles and publicly available information and data 

sources routinely relied upon by economists and other airline industry analysts 

including the Official Airline Guide (“OAG”) schedule database, the U.S. 

Department of Transportation’s (“DOT”) Survey of Origin and Destination 

passengers (“DB1B”) database, airline annual reports and other filings made with 

the U.S. Securities and Exchange Commission (“SEC”), press releases, academic 

publications, as well as airline and financial trade press sources; (ii) information 

provided by Company officials, and (iii) my own knowledge and more than 30 

years of experience from working with, researching and/or regulating the airline 

and aerospace industries.1

 My investigation and consideration of the issues in this 

matter is ongoing. Accordingly, my opinions are subject to revision based on the 

work I may complete in the future and further documents, data, testimony, and 

other materials I may review. 

 

 

1

 A list of documents and information sources considered is included as Appendix B. 
3 

II. OVERVIEW AND SUMMARY OF OPINIONS

6. Based on my analysis of the issues to date, I have formed the following opinions: 

• The Port Authority is not a normal commercial landlord and EWR is not a 

normal piece of commercial real estate. On the contrary, the Port Authority 

enjoys de facto monopoly power in the provision of airport services in the 

New York City (“NYC”) metropolitan area.2 Thus, unlike typical 

commercial tenants who can move to another building with a different 

landlord, airlines have no realistic alternative to the Port Authority’s 

facilities if they want to compete for the overwhelming majority of 

passengers that travel by air to or from the NYC metropolitan area. 

• The NYC metropolitan area is—by a wide margin—the largest U.S. origin 

and destination (“O&D”) market for both domestic and international 

travel.3 As a result, for most airlines—and particularly the large network 

carriers4

 whose business model depends on providing passengers with 

convenient and frequent access to key business and leisure destinations—

access to the NYC metropolitan area is critical. In addition, the three large 

network carriers and one LCC operate hubs in the NYC metropolitan area 

 

2

 For the purposes of this report, I refer to the NYC metropolitan area as the geographic area that includes 

New York City, Long Island, the lower Hudson River valley and the North-Eastern counties of New Jersey

(i.e., Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, 

Sussex, and Union). 

3

 O&D (“origin and destination”) passengers are counted based on the starting and ending point of each 

passenger’s journey, regardless of whether or not they make a connection. For example, a passenger 

traveling from New York City to Los Angeles making a connection in Chicago is counted as an O&D 

passenger for New York City and Los Angeles (but not for Chicago). 

4

 Throughout this report, I use the term “large network carriers” to refer to American (recently merged with 

US Airways), Delta (recently merged with Northwest) and United (recently merged with Continental). 

These carriers are the surviving set of legacy carriers that operate on a “hub-and-spoke” traffic model, 

service a wide variety of both domestic and international destinations using multiple aircraft types, and 

have workforces relatively more senior than the newer entrants. I use the term “LCC” to refer to the 

category of generally lower-cost air carriers such as Southwest, JetBlue, Spirit, Virgin America, Frontier 

and Allegiant. Most (but not all) of the LCCs’ operating models make use of point-to-point services, and 

utilize a simplified fleet of one or two types of narrowbody aircraft, lower average fares, more flexible 

work rules, quick turn-around times, and (because of their relatively recent vintage) an employee 

population of lesser seniority than the large network carriers. 
4 

(United at EWR, American at JFK, Delta at both JFK and LGA, and 

JetBlue at JFK). 

• The Port Authority controls all three major commercial airports serving the 

NYC metropolitan area (LGA, JFK and EWR)5, giving the Port Authority 

an effective monopoly in the provision of commercial airport facilities in 

the NYC metropolitan area. This monopoly gives the Port Authority 

substantial market power vis-à-vis airlines that use (or want to use) the 

airports under its control. 

• Like other monopolies and public utilities, airports have long been subject 

to heightened levels of public scrutiny and regulatory oversight designed to 

prevent them from abusing their market power by increasing prices above 

competitive levels, restricting output, or engaging in price discrimination. 

These concerns (among others) led Congress to subject airports and their 

rates and charges to federal regulatory review. 

• The Port Authority has used its market power to impose fees for airlines at 

EWR well above those of its other large NYC metropolitan airports (e.g., 

LGA and JFK). For example, the weight-based landing fee at EWR for a 

typical Boeing 737-800 flight is $1,722 compared to only $981 at JFK and 

$1,358 at LGA. 

• Higher landing fees at EWR vis-à-vis its other large NYC metropolitan 

area airports are not justified by higher costs at EWR. While the Port 

Authority’s landing fees at EWR are 75% higher than those at JFK (for a 

comparable 737-800 flight), the Port Authority’s cost per enplaned 

passenger at EWR is 8% less than its cost at JFK. 

• The Port Authority’s ability to set landing fees at EWR well above costs 

(enabled by the Port Authority’s de facto monopoly power) has resulted in 

 

5

 As discussed below, the Port Authority also controls Stewart International (“SWF”) and Teterboro 

(“TEB”) airports. 
5 

the Port Authority consistently earning profit margins of over 20% at 

EWR. 

• Because JFK, LGA and EWR are “slot-constrained” airports operating at 

full capacity throughout most of the day, it would not be possible for 

United to secure sufficient slots at either JFK or LGA to relocate its hub 

from EWR in order to take advantage of the lower landing fees at those 

airports. Likewise, there are no other airports in the NYC metropolitan 

area that have the capacity (e.g., terminals, gate facilities and runway 

length) to accommodate the hubbing operations of a large network carrier 

such as United. 

• Given the size and importance of the NYC metropolitan area and the 

disparity in airport access costs for airlines across the three major NYC 

area airports, airlines that rely on EWR for the bulk of their NYC area 

operations (e.g., United) are placed at competitive disadvantage vis-à-vis 

airlines that rely primarily on LGA and/or JFK to serve the NYC 

metropolitan area market. 

7. The remainder of this report is organized as follows. Section III shows that the 

Port Authority is not a normal commercial landlord with regards to EWR, but in 

fact, holds a monopoly position for the provision of airport services in the NYC 

metropolitan area. Section IV shows that the Port Authority has used its monopoly 

power to impose landing fees at EWR that are the highest in the country, and 

substantially higher than landing fees at JFK. Section IV also demonstrates that as 

a result of EWR’s excessively high fees, the Port Authority has been earning 

excessive profits at EWR over the past five years, which have been diverted by the 

Port Authority for non-aeronautical projects. Section V describes how the 

unreasonably high landing fees at EWR have put United at a competitive 

disadvantage vis-à-vis other U.S. airlines serving the NYC metropolitan area. 

Section 0 contains a brief summary of my conclusions. 
6 

III. THE PORT AUTHORITY HAS MONOPOLY POWER OVER 

AIRLINE ACCESS THE NEW YORK CITY METROPOLITAN 

AREA 

A. The NYC Metropolitan Area is the Largest Origin/Destination Market in 

the United States by a Wide Margin 

8. The NYC metropolitan area is—by a wide margin—the largest airline “market”6

 as 

measured by O&D passengers in the United States, both for domestic and 

international travel. As shown in Exhibit 1, over 57 million domestic passengers 

traveled to or from the NYC metropolitan area in 2013, approximately 40% more 

than Los Angeles, the second largest domestic O&D market. Exhibit 1 also shows 

that the NYC metropolitan area accounted for approximately $12.7 billion in 

domestic airline revenues—48% more than second ranked Los Angeles—and 

6.9% of all domestic O&D revenue nationwide in 2013. 

 

6

 Although “city-pairs” (i.e., passengers traveling between one city or metropolitan area and another) are a 

standard method of defining a market in the airline industry when conducting traditional competition 

analysis between airlines, the focus of my analysis in this declaration is on competition (or the lack thereof) 

for airport facilities in a particular city (i.e., the NYC metropolitan area). Thus, throughout this declaration, 

I use the term “market” to refer to the aggregation of all of the individual city-pairs that are either to/from 

the metropolitan area of interest. 
7 

EXHIBIT 1: LARGEST 15 DOMESTIC O&D MARKETS IN THE UNITED STATES 

(RANKED BY REVENUES) 

9. For international air travel, the NYC metropolitan area is the largest market in the 

United States by an even wider margin. As shown in Exhibit 2, the NYC 

metropolitan area accounted for over 13.7 million international passengers in 2013 

(approximately twice that of Miami, the second largest market for international 

passenger traffic). Exhibit 2 also shows that international travel to/from New York 

City accounted for $7.2 billion in U.S. airline revenues in 2013—as much as San 

Francisco, Los Angeles and Chicago combined—and approximately 15% of all 

U.S. carrier international revenues.7

 

 

7

 For international tickets, the U.S. DOT DB1B international data set reflects a 10% sample of all tickets 

for which at least one segment was operated by a U.S. carrier. Thus, part of the revenues for some of the 

tickets in the data set will be shared with foreign carriers based on upon pro-rate or revenue sharing

agreements between carriers. 

Source: US DOT DB1B, FY2013.

Notes: Airports in the following domestic metropolitan areas are grouped: Chicago (ORD, MDW), Cincinnati (CVG, DAY), Cleveland (CLE, 

CAK), Dallas (DFW, DAL), Houston (HOU, IAH), Los Angeles Basin (LAX, BUR, LGB), Miami (MIA, FLL), New York (LGA, JFK, EWR), San 

Francisco/Bay Area (SFO, OAK), Washington DC/Baltimore (DCA, IAD, BWI), and Tampa (TPA, PIE).

Metropolitan Area Millions % of US Total Billions % of US Total

1 New York 57.8 6.3% $12.7 6.9%

2 Los Angeles 40.5 4.4% $8.6 4.7%

3 Washington 39.2 4.3% $7.7 4.2%

4 Chicago 40.0 4.4% $7.6 4.1%

5 San Francisco 34.3 3.8% $7.5 4.1%

6 Dallas/Ft.Worth 27.5 3.0% $5.6 3.0%

7 Atlanta 25.5 2.8% $5.1 2.8%

8 Las Vegas 29.2 3.2% $5.1 2.8%

9 Miami 27.5 3.0% $5.1 2.8%

10 Denver 27.6 3.0% $4.7 2.6%

11 Boston 22.9 2.5% $4.7 2.5%

12 Houston 20.4 2.2% $4.6 2.5%

13 Orlando 26.5 2.9% $4.6 2.5%

14 Seattle 20.9 2.3% $4.4 2.4%

15 Phoenix 22.2 2.4% $4.1 2.2%

Passengers Revenue
8 

EXHIBIT 2: LARGEST 15 INTERNATIONAL O&D MARKETS IN THE UNITED STATES 

(RANKED BY REVENUES)

B. Airports are Natural Monopolies 

10. Monopoly power arises when a factor or factors, broadly described as barriers to 

entry, effectively prevent or severely limit the ability of other producers to enter a 

market. These factors include governmentally imposed restrictions on entry (e.g., 

strict licensing requirements) as well as large economies of scale or scope that 

sharply limit the number of economically viable producers. The latter case is 

sometimes described as a “natural monopoly.” 

11. The market for commercial airport services in general, and in the NYC 

metropolitan area in particular, is characterized by exceptionally high barriers to 

entry. To begin with, commercial airports exhibit significant economies of scale 

and scope. Airport scale economies (i.e., decreasing unit costs over a wide range 

of outputs) arise principally from “the necessity of making a large investment 

merely in order to be in a position to serve customers on demand.”8

 These 

investments in the case of airports include the acquisition of large parcels of land 

(typically requiring the use of eminent domain) and the construction of runways, 

 

8

 Alfred Kahn, The Economics of Regulation, John Wiley & Sons, 1970, Vol. II, p. 119. 

Source: US DOT DB1B, FY2013.

Notes: Airports in the following domestic metropolitan areas are grouped: Chicago (ORD, MDW), Cincinnati (CVG, DAY), Cleveland (CLE, 

CAK), Dallas (DFW, DAL), Houston (HOU, IAH), Los Angeles Basin (LAX, BUR, LGB), Miami (MIA, FLL), New York (LGA, JFK, EWR), San 

Francisco/Bay Area (SFO, OAK), Washington DC/Baltimore (DCA, IAD, BWI), and Tampa (TPA, PIE).

Metropolitan Area Millions % of US Total Billions % of US Total

1 New York 13.7 15.8% $7.2 14.7%

2 Miami 6.8 7.8% $2.8 5.7%

3 Los Angeles 4.6 5.3% $2.4 5.0%

4 San Francisco 3.8 4.4% $2.6 5.2%

5 Washington 3.7 4.3% $2.3 4.7%

6 Chicago 3.7 4.3% $2.2 4.6%

7 Houston 2.7 3.1% $2.0 4.1%

8 Atlanta 2.6 3.0% $1.5 3.0%

9 Orlando 2.5 2.9% $1.2 2.4%

10 Boston 2.5 2.8% $1.3 2.7%

11 Dallas/Ft.Worth 2.4 2.7% $1.3 2.6%

12 Honolulu 1.9 2.3% $1.7 3.4%

13 Philadelphia 1.7 2.0% $0.9 1.9%

14 Detroit 1.6 1.9% $1.1 2.3%

15 Minneapolis/St. Paul 1.5 1.8% $0.9 1.9%

Passengers Revenue
9 

taxiways, access roadways, terminal facilities, towers, runway lighting and other 

systems—all investments for which the minimum efficient scale is large relative to 

demand. As the Federal Aviation Administration has observed: 

[G]iven the high cost of airport construction (e.g., more than $4 

billion for the new Denver International Airport), building a new 

airport is not a common capacity enhancement technique.9

12. Given the high barriers to entry for airports, it is not surprising that the need to 

protect airport users from the potential abuse of monopoly power by airports has 

been widely recognized10 or that it underlies the Department’s Policy Regarding 

Airport Rates and Charges because, unlike non-aeronautical services and facilities, 

airport revenues derived from aeronautical rates and charges are typically not 

subject to effective market discipline.11 In order to prevent entities with such 

market power from abusing that power, governments both in the United States and 

abroad have subjected monopolies and other public utilities to heightened levels of 

public scrutiny and regulatory oversight—as did Congress when it subjected 

airport rates and charges to federal regulatory review. 

 

 

9

 Federal Aviation Administration, 1998 Capacity Enhancement Plan, Chapter 3, p. 45. 

10 See Comments of the Federal Trade Commission Staff of the Bureau of Economics to U.S. Department 

of Transportation, September 14, 1994, at 11-12: “[A]irport services generally are not produced in 

competitive markets.... Accordingly, incumbent airport operators might possess market power in the 

pricing of airport services. In this instance it may be possible for the FAA to regulate the pricing of airport 

services in ways that reduce the welfare loss arising from monopoly pricing, yet allow airports to cover 

their costs.” See also, “Proposal for a Council Directive on Airport charges,” 97/C 257/03, Official Journal 

of the European Communities, 22/8/97, Para. 12, which described airport services as “a monopoly 

situation.” Likewise, the EC’s Economic and Social Committee noted that “...the airport management 

body is in a monopoly situation as regard to the provision of airport facilities and services.” 98/C73/08, 

Ibid, 9/3/98 Para. 1.1.1 and Leonardo J. Basso and Anming Zhang, “An Interpretative Survey of Analytical 

Models of Airport Pricing”, Chapter 4 in Advances in Airline Economics, Volume 2, Darin Lee, Editor, at 

page 90: “It has usually been accepted that airports enjoy a local monopoly position because they have a 

captive market.” 

11 “Over time, the DOT assumes that the limitations on airport revenue use, combined with effective market 

discipline for non-aeronautical services and facilities, will be effective in holding aeronautical costs to 

airport revenues while providing reasonable aeronautical fees for services and facilities.” U.S. Department 

of Transportation Federal Aviation Administration Order 5190.6B at page 18-10. 
10 

C. The Port Authority is a De Facto Monopolist for the Provision of Airport 

Services in the NYC Metropolitan Area 

13. By virtue of the fact that the Port Authority controls all three major airports in the 

New York City metropolitan area (LGA, JFK and EWR) as well as two smaller 

area airports (SWF and TET), it is a de facto monopolist in the provision of airport 

services in the New York City metropolitan area. Exhibit 3 shows the location and 

average scheduled daily departures in 2014 by all commercial passenger airlines 

(both domestic and foreign) at each of the main airports in the NYC metropolitan 

area.12

EXHIBIT 3: AVERAGE DAILY SCHEDULED DEPARTURES BY COMMERCIAL PASSENGER 

AIRLINES AT NYC METROPOLITAN AREA AIRPORTS, 2014 

14. Given the proximity of LGA, EWR and JFK airports to one another and to the 

central core of New York City, these three airports are substitutes for many 

passengers wanting to travel by air to and from the NYC metropolitan area. 

Consequently, it should come as no surprise that most government agencies, 

 

12 Teterboro airport, which is also controlled by the Port Authority is currently used only for general 

aviation and thus had no scheduled commercial passenger flights in 2014. 
11 

including the U.S. DOT,13 U.S. Department of Justice (“DOJ”)14 and U.S. 

Government Accountability Office (“GAO”)15 have frequently grouped the three 

into a single market when conducting competition analyses. 

15. The substitutability among the three largest airports in the NYC metropolitan area 

(all of which are Port Authority controlled) for many passengers is also confirmed 

by an examination of United’s frequent flyer plan (“Mileage Plus”) data. Exhibit 4 

shows the number of Mileage Plus members by zip code who flew to/from EWR at 

least once during the year ending June 30, 2014 and illustrates that a substantial 

number of Mileage Plus members use EWR despite the fact that their zip codes are 

closer (or equal distance) to LGA and JFK than to EWR. The implication of this 

behavior is clear: airlines at EWR, LGA and JFK compete with one another for 

many of the same passengers. 

 

13 See, for example, The Low-Fare Evolution, Part II –Third Quarter 2002, U.S. Department of 

Transportation, Office of Aviation and International Affairs, Aviation Analysis Domestic Aviation 

Competition Issue Brief Number 19, Appendix A, treating EWR, JFK and LGA as one of their “Composite 

Cities”. 

14 See, for example, Public Comments of the Department of Justice on the Show Cause Order, Joint 

Application of Air Canada, The Austrian Group, British Midland Airways Ltd, Continental Airlines, Inc., 

Deutsche Lufthansa Ag, Polskie Linie Lotniecze Lot S.A., Scandinavian Airlines System, Swiss 

International Air Lines Ltd., Tap Air Portugal, United Air Lines, Inc. to Amend Order 2007-2-16 under 49 

U.S.C. §§ 41308 and 41309 so as to Approve and Confer Antitrust Immunity, Docket OST-2008-0234, 

(June 26, 2009), noting that DOJ “agree[d] with the [DOT] Order that the competitive structure of 

transborder routes is very similar to U.S. domestic routes” (page 27) and that “[t]he New YorkMontreal/Toronto markets are currently served by four carriers on a non-stop basis – American [from LGA 

and JFK], Delta [from JFK] and the two Applicants [from EWR].” (footnote 71). 

15 See, for example, “AIRLINE MERGERS: Issues Raised by the Proposed Merger of United and 

Continental Airlines”, U.S. GAO, May 27, 2010, at footnote 22: “It is generally preferable, time 

permitting, to assess city-pair, rather than airport-pair, changes in competition. Some larger U.S. cities 

(New York, Chicago, Los Angeles, Washington D.C.) have more than one commercial airport that can 

compete for passenger traffic.” 
12 

EXHIBIT 4: NUMBER OF UNITED’S MILEAGE PLUS MEMBERS WHO USE EWR BY ZIP 

CODE 

 

16. Because of the commercial importance for airlines of providing service to the 

NYC metropolitan area and the paucity of viable airport alternatives, airlines have 

no choice but to deal with the Port Authority. Large network carriers with hubs in 

the NYC metropolitan area, in particular, must do business with the Port Authority 

because, given the required proximity to traffic as well as the combination of 

runway, gate and terminal facility capacity needed to sustain a viable network of 

services, there are no other airports in the area that could serve as substitutes for 

EWR, JFK and LGA.16 As shown in Exhibit 5, passenger facilities at ISP, HPN 

and SWF are each limited to a single terminal. Likewise, the runway lengths at 

both ISP (7,006 feet) and HPN (6,549 feet) are insufficient to accommodate the 

 

16 As described in Section V below, all three of the large network carriers (United, Delta and American) in 

addition to LCC JetBlue operate hubs in the New York City metropolitan area. United currently utilizes 72 

gates at EWR to support its approximately 800 average daily operations (take-offs and landings) at that 

airport during peak months. Source: OAG, FY 2014 and United Airlines. 
13 

widebody aircraft types typically used for long-haul international flights.17 Simply 

put, JFK, EWR and LGA—all Port Authority controlled—are the only airports in 

the NYC metropolitan area that have sufficient facilities to sustain the hubbing 

operations by United or the other large network carriers. 

EXHIBIT 5: FACILITIES AT NYC METROPOLITAN AREA AIRPORTS

17. Because of their central location within the NYC metropolitan area as well as their 

capacity (in terms of runways, terminals, gates, etc.), the three largest Port 

Authority airports account for the overwhelming majority of passengers traveling 

to and from the NYC metropolitan area. As shown in Exhibit 6, airports controlled 

by the Port Authority account for 96.1% of O&D passengers traveling to/from the 

New York City metropolitan area.18

 

17 At maximum takeoff weight, a Boeing 777-200 requires a runway of approximately 11,000 feet (at sea 

level) to take off. See http://www.boeing.com/assets/pdf/commercial/airports/acaps/7772sec3.pdf. LGA’s 

runway length of approximately 7,000 feet does not constrain the types of aircraft airlines would want to 

fly to/from that airport in light the FAA’s so-called “perimeter rule” that restricts flights to/from that airport 

(with a small handful of exceptions) to less than 1,500 miles. Although SWF has a runway of sufficient 

length (11,817 feet) to support the widebody aircraft used by U.S. carriers on long-haul international

flights, it only has seven gates. 

18 The percentages in Exhibit 6 actually understate the share of total O&D passengers that use Port 

Authority airports. This is because the U.S. DOT DB1B data does not include itineraries that do not have 

at least one segment operated by a U.S. carrier. 

Sources: flightstats.com, globalair.com, ifly.com, macarthurairport.com, PANYNJ.gov.

* Controlled by Port Authority.

Airport Number of Passenger 

Terminals Number of Gates Maximum Runway Length (ft)

JFK* 6 111 14,511

EWR* 3 109 11,000

LGA* 4 78 7,003

ISP 1 16 7,006

HPN 1 6 6,549

SWF* 1 7 11,817
14 

EXHIBIT 6: 96.1% OF O&D PASSENGERS (DOMESTIC AND INTERNATIONAL)

TRAVELING TO/FROM THE NYC METROPOLITAN AREA USE AIRPORTS CONTROLLED 

BY THE PORT AUTHORITY

18. Likewise, Exhibit 7 shows that airports controlled by the Port Authority have a 

dominant share of commercial passenger airline departures. Airports controlled by 

the Port Authority account for 96.1% of all commercial passenger flights from the 

NYC metropolitan area. 
15 

EXHIBIT 7: 96.1% OF ALL COMMERCIAL PASSENGER AIRLINE DEPARTURES 

(DOMESTIC AND INTERNATIONAL) IN THE NYC METROPOLITAN AREA ARE FROM 

AIRPORTS CONTROLLED BY THE PORT AUTHORITY

19. In sum, the Port Authority is a de facto monopolist in the provision of airport 

facilities in the NYC metropolitan area. As a result, airlines seeking to provide 

service to passengers traveling to/from the NYC metropolitan have no viable 

alternative to dealing with the Port Authority. Moreover, there is no realistic 

prospect for entry of new airport facilities independent of the Port Authority into 

the market for airport facilities in the NYC metropolitan area particularly at the 

scale that would be required for a large network carrier such as United to relocate 

its hub from EWR. Consequently, the Port Authority has monopoly power vis-àvis airlines that serve EWR (as well as LGA and JFK). 
16 

IV. MONOPOLY POWER HAS ENABLED THE PORT AUTHORITY 

TO IMPOSE LANDING FEES AT EWR THAT ARE THE 

HIGHEST IN THE COUNTRY AND GENERATE HUGE PROFITS 

FOR THE PORT AUTHORITY

20. Landing fees at EWR are the highest in country. As shown in Exhibit 8, landing 

fees for a Boeing 737-800 at EWR are more than double the landing fees at 

comparably sized airports in other cities such as San Francisco International 

(“SFO”) or Boston Logan International (“BOS”), both of which also have limited 

geographic footprints for expansion and are located in a metropolitan area with a 

high cost of living. 

EXHIBIT 8: 737-800 LANDING/TAKE-OFF FEES AT MAJOR U.S. AIRPORTS, 2013 

21. The high fees at EWR do not appear to be cost-justified. It is well-understood that 

prices for the factors of production required to operate and maintain an airport 

(labor, land, construction, etc.) tend to be higher in the NYC metropolitan area 

than in most other parts of the country, yet the Port Authority charges lower 

landing fees at JFK and LGA (substantially lower in the case of JFK) than it does 

$981

$684 $673 $663 $658

$565 $527 $515

$437 $386

$257

$120

$1,722

$1,358

$1,086

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

EWR LGA JFK ORD DEN BOS LAX SFO IAD DCA PHL IAH DFW MIA ATL

Non-Port Authority Airports Port Authority Airports

Sources: Boeing.com, United Airlines.

Notes: All landing fees are calculated by taking the product of the airport fee per 1,000 lbs. reported in the Complaint of United Airlines and the 

aircraft’s Maximum Landing Weight (MLW). The MLW is 146,300 lbs.
17 

at EWR notwithstanding the fact that the Port Authority’s cost per enplanement 

(“CPE”) at EWR ($33.66) is 10% lower than the CPE at JFK ($37.20).19 

22. The Port Authority earns revenues substantially in excess of its costs at all three 

airports. In 2013, for example, the Port Authority had net income of $19 million, 

$170 million and $177 million at LGA, JFK and EWR, respectively.20 Moreover, 

although the absolute dollar profits at EWR and JFK were similar in 2013, JFK 

handled 50% more passengers and twice as much cargo as did EWR that year.21 

Consequently, the Port Authority’s profit per passenger at EWR in 2013 was 49% 

higher than at JFK (and seven times higher than at LGA), as shown in Exhibit 9. 

EXHIBIT 9: PORT AUTHORITY PROFIT PER PASSENGER AT EWR, JFK AND LGA,

2009-2013 

 

19 Source: FAA CATS database, 2013. The FAA’s airport financial reports are contained in the 

Compliance Activity Tracking System, commonly referred to as “CATS”. Landing fees are not airports’ 

only source of revenue. For example, airports also receive revenue from rentals and non-aeronautical users 

(concessions, car rentals, etc.). 

20 Source: The Port Authority of NY & NJ Financial Statements and Appended Notes for the Year ended 

December 31, 2013, at page 90. Moreover, 2013 did not represent an abnormal year in terms of the Port

Authority’s profitability at these airports. For example, in 2012, the Port Authority earned a combined 

profit of $400 million from EWR, JFK and LGA. Source: Ibid. 

21 Source: The Port Authority of NY & NJ Financial Statements and Appended Notes for the Year ended 

December 31, 2013, at page 92. 

Sources: Port Authority 2009-2013 Annual Financial Statements, Port Authority 2013 Annual Traffic Report.

Notes: “Profits” are defined on the Port Authority financial statements as “income from operations” minus “interest & other expenses” plus “PFCs Grants & Other”. 

Passengers are the total of domestic, Puerto Rico, Canada, Bermuda & Caribbean, Mexico, Latin America, Trans-Atlantic, and Trans-Pacific.

$5.30

$4.63

$5.17 $5.26

$5.05

$3.69

$4.03

$2.75

$3.86

$3.38

$2.00

$1.77

$1.22 $1.20

$0.72

$0

$1

$2

$3

$4

$5

$6

2009 2010 2011 2012 2013

EWR JFK LGA
18 

23. The Port Authority’s ability to charges prices well in excess of its costs (thereby 

earning high profits, particularly at EWR) is a direct result of the fact that it enjoys 

a monopoly position for the provision of airport facilities in the New York City 

metropolitan area. The Port Authority’s average profit margin at EWR over the 

past five years (i.e., 2009-2013) has exceeded United Airlines’ system-wide net 

profit margin by a factor of nearly ten. 

EXHIBIT 10: PORT AUTHORITY “PROFIT” MARGIN AT EWR VS. UNITED AIR LINES 

NET PROFIT MARGIN: 2009 TO 201322

24. Unlike most other U.S. airport operators, the Port Authority’s portfolio of assets 

extends well beyond the six airports it operates. For example, in addition to 

operating JFK, LGA, EWR, SWF, TET, and Atlantic City Airport (“ACY”), the 

Port Authority also operates the World Trade Center and manages a large amount 

of transportation infrastructure (including the Lincoln Tunnel and the George 

Washington Bridge), as well as substantial seaport facilities throughout the region. 

And there is clear evidence that the Port Authority has been diverting a substantial 

 

22 The Port Authority’s “profit” margins at JFK and LGA averaged 16.1% and 10.3%, respectively, 

substantially lower than its margin at EWR over this period (i.e. 2009-2013). Source: Port Authority 

Annual Financial Reports, 2009-2013. 

24.2%

20.5%

22.5% 22.9% 22.1%

-0.8%

4.6% 3.9%

1.6% 2.9%

-5%

0%

5%

10%

15%

20%

25%

30%

2009 2010 2011 2012 2013

Port Authority EWR Profit Margin United Airlines Net Profit Margin

Sources: United Airlines Q4 Earnings Reports 2010-2013, Port Authority Annual Financial Reports 2009-2013.

Note: Profit margin is the ratio of Net Income to Revenues. United Airlines’ net income excludes special charges. United Airlines’ profit margins in 2009 and 2010 reflect Pro Forma 

consolidated results for UAL and Continental Airlines. 
19 

portion of the excess revenues it earns from EWR to non-aeronautical uses. For 

example, in 2012, a Port Authority consultant reported that “Over the past five 

years, the Aviation line department has been the only positive free cash flow 

contributor to the Port Authority.”23 Likewise, as shown in Exhibit 11, between 

2009 and 2013, the Port Authority generated positive free cash flows of $3.4 

billion from its airport operations, while generating $8.1 billion in negative cash 

flows on its non-airport related projects. 

EXHIBIT 11: PORT AUTHORITY ANNUAL CASH FLOWS BY OPERATING SEGMENT,

2009-2013 

25. Simply put, the Port Authority has been using the excess profits generated by the 

exceedingly high landing fees at EWR (and to a lesser extent, JFK) to fund nonairport related projects.24 Moreover, the ability of the Port Authority to effectively 

 

23 Navigant, Phase II Report to the Special Committee of the Port Authority of New York and New Jersey, 

September 2012, at page 5. 

24 See Mitchell L. Moss and Hugh O’Neill, “A Port Authority that Works,” NYU Wagner Rudin Center for 

Transportation Policy and Management, March 2014, page 6 “[T]he Port Authority has, year by year, 

become more reliant on the revenues generated by its money –making facilities – its network of interstate 

bridges and tunnels, most notably the George Washington Bridge, and John F. Kennedy, LaGuardia and 

Newark Liberty airports – to subsidize the operation of, and investment in, those that can’t cover their 

costs, and to help finance state capital projects that provide no return to the Port Authority.” 

Source: Port Authority 2009-2013 Annual Financial Statements.

Notes: “Free Cash Flow” are defined as “net income” plus “interest grant & other expenses” plus “depreciation and amortization” less “net capital expenditure.” See 

Navigant, “Phase II Report to the Special Committee of the Port Authority of New York and New Jersey,” September 2012 at page 14.

$366 

$592 

$865 $811 $774 

$(1,096)

$(1,826)

$(2,054)

$(1,472)

$(1,660)

-$2,500

-$2,000

-$1,500

-$1,000

-$500

$0

$500

$1,000

$1,500

2009 2010 2011 2012 2013

Millions

Air Terminal Free Cash Non-Air Terminal Port Authority Free Cash
20 

force airlines—particularly those using EWR—to subsidize the Authority’s nonairport related projects is indicative of its monopoly power over airlines in the 

NYC metropolitan area. 

V. UNREASONABLY HIGH AIRPORT COSTS FOR AIRLINES AT 

EWR PUT UNITED AT A COMPETITIVE DISADVANTAGE VS.

OTHER U.S. CARRIERS

26. Because of the size and economic significance of the NYC metropolitan area,25

every significant U.S. airline provides service to one or more of the area’s airports, 

and all three U.S. large network carriers plus JetBlue operate hubs in the NYC 

metropolitan area: United at EWR, American at JFK, Delta at both JFK and 

LGA,26 and JetBlue at JFK. Multiple hubs in the NYC area result in vigorous 

competition among these (and other) carriers for both passengers traveling to/from 

the NYC metropolitan area as well as the millions of passengers each year who 

make connections at EWR, JFK or LGA en route to their final destinations.27 

Exhibit 12 shows the number of destinations served non-stop from the NYC 

metropolitan area by each of the four airlines operating a NYC-area hub. 

 

25 See Exhibit 1 and Exhibit 2 above. 

26 In 2014, Delta offered an average of 169 daily departures to 108 destinations from JFK and 236 daily 

departures to 73 destinations from LGA. Source: OAG. 

27 As noted in Exhibit 1 above, there were over 57 million domestic O&D passengers traveling to/from the

NYC metropolitan area in 2013, accounting for over $12 billion in revenues for U.S. carriers. 
21 

EXHIBIT 12: NUMBER OF NON-STOP DESTINATIONS SERVED FROM EWR, LGA AND 

JFK, 2014 

27. Given the size of the NYC metropolitan area market for both domestic and 

international air travel and the fact that it has become a focal point in the respective 

networks of United,28 Delta,29 American30 and JetBlue,31 it should come as no 

surprise that each of these carriers generates a substantial proportion of its total 

 

28 See, for example, Impacts of Continental Airlines Operations on the New York-New Jersey Regional 

Economy, NERA Economic Consulting, November 2009. United and Continental merged in 2010. 

29 See, for example, Delta’s 2013-Q3 Earnings Conference Call: “If you look at the New York market, it is 

a huge market. And what we've been able to do at LaGuardia has been pretty remarkable in terms of 

turning that to a fully-allocated profitable business.” 

30 See, AMR 2014 Form 10-K, page 53: “The Company has primary hubs in Charlotte, Chicago, 

Dallas/Fort Worth, Los Angeles, Miami, New York City, Philadelphia, Phoenix and Washington, D.C.” 

31 JetBlue is headquartered in New York City and has trademarked the term “New York’s Hometown 

Airline”. 

Source: OAG, 2014.

Notes: Includes destinations served from JFK, EWR, and LGA 10 or more times during the year. 

76

57

24 22

103

84

45 43

179

141

69 65

0

20

40

60

80

100

120

140

160

180

200

United Delta American JetBlue

International Domestic
22 

passenger revenues from traffic traveling to or from the NYC metropolitan area. 

This is shown in Exhibit 13.32

EXHIBIT 13: PERCENTAGE OF CARRIERS’ PASSENGER REVENUE GENERATED BY 

TRAFFIC TRAVELING TO/FROM NYC 

A. United is Uniquely Exposed to the Port Authority’s Excessively High 

Access Charges at EWR 

28. As the Port Authority itself has acknowledged, the NYC “metropolitan area is 

served by a single airport system operated by the Port Authority to serve one travel 

region. ... The market area of one airport overlaps the market areas of others so 

that air service at one of the Port Authority airports competes with the air service 

of one or more other airports.”33 Likewise, from an airline perspective United’s 

 

32 Including passengers connecting at New York raises the share of revenue generated to 54% for JetBlue,

27% for United, 19% for Delta, and 17% for American. 

33 The Port Authority noted that “The New York / New Jersey metropolitan area airport system includes 

LGA, John F. Kennedy International Airport (“JFK”), Newark Liberty International Airport (“EWR”), and 

Teterboro Airport. TEB is solely a General Aviation airport.” See In the matter of Petition for Waiver of 

the Terms of the Order Limiting Scheduled Operations at LaGuardia Airport. DOCKET NO. FAA-2010-

0109. Comment of the Port Authority of New York and New Jersey at page 3. 

Source: US DOT DB1B, FY2013.

Note: Includes both domestic and international passengers. 

50.2%

18.4%

14.9% 14.3%

0%

10%

20%

30%

40%

50%

60%

JetBlue United Delta American
23 

EWR services compete with other airlines whose services operate from JFK and/or 

LGA. And because LGA, JFK and EWR are owned by a single entity, there are no 

competitive forces to constrain the Port Authority’s ability to charge excessively 

high landing fees. In the present case United is uniquely harmed by the 

excessively high landing fees charged by the Port Authority at EWR. This is 

because United is the only U.S. carrier that focuses its NYC metropolitan area 

operations at EWR. Consequently, and as shown in Exhibit 14, 87.1% of United’s 

flight operations in the NYC area are at EWR, compared to only 5.7% for Delta, 

11.5% for American and 9.8% for JetBlue. 

EXHIBIT 14: PERCENTAGE OF NYC METROPOLITAN AREA DEPARTURES BY AIRPORT,

2014 

29. In industries that are not characterized by monopoly suppliers of key inputs of 

production, firms can respond to differential input costs by switching from one 

supplier to another. In the case of the excessively highly landing fees set by the 

Port Authority at EWR, however, United cannot simply switch to the other NYC 
24 

area airports to take advantage of the lower landing fees at those airports. This is 

because all three major NYC area airports (EWR, JFK and LGA) are subject to 

“slot-controls” that limit the number of operations (i.e., takeoffs and landings) that 

can be performed each hour so as to prevent excessive congestion and delays.34

 

And since JFK and LGA are already effectively operating at capacity, it would be 

impossible for United to shift its hub operations in the NYC metropolitan area to 

either JFK or LGA without Delta, American and/or JetBlue leaving those 

airports.35 

B. As a Result of the Port Authority’s Excessively High Landing Fees at 

EWR, United is Competitively Disadvantaged vis-à-vis Other U.S. 

Airlines 

30. Exhibit 15 shows that for a typical domestic flight operated using a 737-800, the 

landing fee per enplaned passenger36 at EWR is 75% higher than at JFK and 38% 

higher than at LGA. Because United has no practical alternative to EWR for its 

hub in the NYC metropolitan area, it has no choice but to pay the excessive fees 

the Port Authority charges for access to EWR, even though these fees put United at 

a disadvantage vis-à-vis other carriers—particularly Delta, American and 

JetBlue37—that are competing for many of the same passengers via their hubs at 

JFK and/or LGA.38

 

34 These slot constraints are in effect between 6:00 AM and 10:59 PM each day of the week at EWR and 

JFK, and at LGA between 6:00 AM and 9:59 PM Monday-Friday, and 12:00 PM and 9:59 PM SaturdaySunday. Source: Slot Controlled Airports: FAA’s Rules Could be Improved to Enhance Competition and 

Use of Available Capacity, United States Government Accountability Office, Report to the Subcommittee 

on Commerce, Science, and Transportation, U.S. Senate, September 2012, page 10. 

35 Moreover, as discussed above, it would be impossible for United to switch its EWR hub operations to 

any of the other NYC metropolitan area airports due to the lack of adequate terminal, gate and runway 

facilities. 

36 An enplaned passenger counts each passenger on each flight separately. 

37 In addition to JetBlue, United competes with other LCCs that serve JFK and LGA, including Southwest, 

Virgin America, Frontier and Sun Country, as well as a host of foreign carriers that use JFK. 

38 United’s services at LGA are limited to an average of 37 daily flights to its other hubs in Chicago, 

Denver, Washington, Houston, and Cleveland, while its services from JFK are limited to an average of 17 

daily flights to Washington, Los Angeles and San Francisco. In contrast, from EWR, United operate an

average of 380 daily flights to 176 destinations worldwide. Source: OAG. 
25 

EXHIBIT 15: LANDING FEES PER ENPLANED PASSENGER AT EWR, LGA, AND JFK

(BASED ON 737-800 WITH 154 SEATS AND AN 80% LOAD FACTOR) 

31. Similarly, Exhibit 16 shows that for a typical long-haul international flight 

operated using a 777-200, the landing fee per enplaned passenger at EWR is 75% 

higher than from JFK.39 This puts United at a competitive disadvantage vis-à-vis 

Delta, American, and a variety of foreign carriers that use JFK as the base of their 

long-haul international services to/from the NYC metropolitan area.40

 

39 As noted earlier, the perimeter rule and runway lengths at LGA prevents carriers from operating longhaul international flights from that airport. 

40 In fact, if the Port Authority charged the same landing fees at EWR as it does at JFK, United would pay 

approximately $81 million less in landing fees in 2014. Sources: IATA and OAG. 

Source: United Airlines.

Note: Cost per passenger calculated based on Boeing 737-800 with 174,200 lbs. take-off weight, 154 seats and 80% load factor.

$13.98

$11.02

$7.97

$0

$2

$4

$6

$8

$10

$12

$14

$16

EWR LGA JFK
26 

EXHIBIT 16: LANDING FEES PER NON-STOP INTERNATIONAL ENPLANED PASSENGER AT 

EWR AND JFK (BASED ON 777-200 WITH 266 SEATS AND AN 80% LOAD FACTOR) 

32. Because Delta, American and JetBlue each operate hubs at NYC airports with 

lower costs than EWR, the scope of competitive harm is far reaching. As shown in 

Exhibit 17, there are more than 100 destinations worldwide that United serves 

from the NYC metropolitan area exclusively from EWR in competition with U.S. 

carriers serving the same destinations from JFK and/or LGA.41

 

41 Exhibit 17 excludes the destinations United also serves from either LGA or JFK (i.e., Houston, Chicago, 

Washington, Cleveland, Los Angeles, San Francisco and Denver). 

Source: United Airlines.

Note: Cost per passenger calculated based on Boeing 777-200 with 545,000 lbs. take-off weight, 266 seats and 80% load factor. 

$24.61 

$14.03 

$0

$5

$10

$15

$20

$25

$30

EWR JFK
27 

EXHIBIT 17: DESTINATIONS SERVED BY UNITED FROM THE NYC METROPOLITAN 

AREA EXCLUSIVELY FROM EWR THAT ARE SERVED BY OTHER U.S. CARRIERS FROM 

JFK AND/OR LGA 

33. The cost disadvantage United confronts because it operates its NYC area hub at 

EWR is magnified for passengers making connections, since for each round-trip 

passenger United connects via EWR, United is effectively required pay the Port 

Authority’s landing fees per passenger twice (once on their outbound flight and 

again when they return to their destination). This is particularly relevant in light of 

the fact that United competes with both American and Delta (as well as a host of 

foreign carriers) for many of the same international connecting passengers that use 

the NYC metropolitan area (i.e., EWR or JFK) as their connecting gateway. For 

example, as shown in Exhibit 18, a substantial proportion (26% overall) of all 

transoceanic international connecting passengers originating from or destined to 

points in the eastern U.S. use either EWR or JFK as their international gateway. 
28 

EXHIBIT 18: PROPORTION OF U.S. CARRIER INTERNATIONAL CONNECTING TRAFFIC 

FROM THE EASTERN U.S. CONNECTING THROUGH EITHER JFK OR EWR 

34. Thus, because United (via EWR) competes directly with American and Delta (via 

JFK) for many of the same transoceanic connecting passengers who use a NYC 

metropolitan airport as their connecting point,42 the substantially higher costs 

imposed by the Port Authority at EWR vis-à-vis JFK (which are magnified for 

connecting passengers as mentioned above) put United at a further competitive 

disadvantage. 

 

42 For example, in 2013, United carried approximately 2.6 million passengers that made a connection to a

transoceanic flight at EWR, whereas American and Delta carried 0.6 million and 1.3 million passengers,

respectively, who made a connection to transoceanic flight at JFK. Source: U.S. DOT DB1B. 
29 

VI. CONCLUSIONS

35. The Port Authority’s control of the three major commercial airports serving the 

NYC metropolitan area provides it with what is effectively a monopoly in the 

provision of commercial airport services in the NYC metropolitan area. Because 

the NYC metropolitan area is the largest U.S. O&D airline market, all three of the 

large network carriers (plus LCC JetBlue) operate one or more hubs there. United 

and the other carriers that operate hubs in the NYC metropolitan area have no

alternative to the Port Authority’s facilities because there are no other airports in 

the NYC metropolitan area with the capacity to serve as a hub. Moreover, the 

“slot-constraints” that limit operations at JFK, LGA and EWR enhance the Port 

Authority’s market power by preventing United from relocating its hub from the 

Port Authority’s highest cost airport (i.e., EWR) to its relatively lower cost airports 

(i.e., JFK or LGA). 

36. Because United’s operations in the NYC metropolitan area are concentrated at its 

EWR hub, the excessive landing fees at EWR place United at a competitive 

disadvantage vis-à-vis American, Delta, JetBlue and other carriers that service the 

NYC metropolitan area market principally with operations at JFK or LGA. These 

excessive landing fees also allow the Port Authority to collect revenues at EWR 

that are well above its costs and generate hundreds of millions of dollars in free 

cash flows that the Port Authority uses to fund its non-aviation related activities. 

 

APPENDIX A: CURRICULUM VITAE OF DANIEL M. KASPER

OFFICE: Compass Lexecon 

200 State Street 

9

th Floor 

Boston, MA 02109 

(617) 520-0260 

E-mail: dkasper@compasslexecon.com 

PROFESSIONAL EXPERIENCE: 

Compass Lexecon, Boston, MA 

Senior Consultant, March 2011-Present 

Mr. Kasper’s practice focuses on economic, financial, labor, regulatory and competition 

policy issues in the transportation industries. Mr. Kasper’s consulting clients have 

included most major U.S. airlines, several foreign airlines, the Air Transport Association, 

the American Association of Railroads, among others. In addition to consulting, Mr. 

Kasper is an experienced expert witness who has testified in numerous matters in the U.S. 

and Canada. His expert testimony includes matters before legislative bodies (U.S. and 

Canada), U.S. Executive Agencies (U.S. Department of Transportation, U.S. Department 

of Labor, National Mediation Board), Presidential Emergency Boards, arbitration panels, 

and courts in the United States and Canada on a range of transportation industry 

economic issues. 

PREVIOUS PROFESSIONAL EXPERIENCE: 

November 1997-February 2011: Managing Director & Head of the Transportation 

Practice, Cambridge, MA Office, LECG (formerly, The Law & Economics 

Consulting Group) 

Mr. Kasper was the founding director of LECG’s Cambridge office and head of the 

firm’s transportation practice. LECG was a leading provider of expertise to 

domestic and international clients in complex matters involving economics, finance 

and accounting. 

 

1993-1997: Partner and Chairman, Transportation Industry Program, COOPERS 

& LYBRAND CONSULTING 

Mr. Kasper joined Coopers & Lybrand in 1993 (when C&L acquired Harbridge 

House, Inc.). He headed C&L’s Transportation Industry Program and directed a 

number of engagements involving domestic and international transportation clients 

in both the private and public sectors including major airlines, railroads 

(AMTRAK, the MBTA), airports, and turnpike authorities in Massachusetts and 
ii 

New Jersey. He also led a Congressionally-mandated review of the Federal 

Aviation Administration's performance and financial requirements. 

1993: Member, National Commission to Ensure a Strong and Competitive Airline 

Industry

In 1993, Mr. Kasper was appointed as one of fifteen voting members of the U.S. 

National Airline Commission, which was created by an act of Congress to assess 

the causes and potential cures for the economic troubles then plaguing the U.S. 

airline industry. After conducting extensive public hearings and analyses, the 

Commission submitted its Report and recommendations to the President and 

Congress in September of 1993. These recommendations included a number of 

proposed changes in Federal regulatory policy. 

1983-1993: Vice President and Corporate Director, HABRIDGE HOUSE, Inc. 

Mr. Kasper managed the firm’s transportation practice and was responsible for a 

wide array of projects involving domestic and international transportation issues 

affecting every mode of transportation. His clients included the U.S. Secretary of 

Transportation (assistance in preparing the National Transportation Policy 

Statement including analyses of issues affecting all transport modes) and the Office 

of the Secretary of Defense (analysis of the Civil Reserve Air Fleet Program). 

1979-1983: UNITED STATES CIVIL AERONAUTICS BOARD 

Director of International Aviation: Mr. Kasper served as Director of International 

Aviation, the Board’s primary advisor and chief line officer for all matters 

involving international aviation. Mr. Kasper frequently represented the Board at 

sub-Cabinet meetings and on inter-agency working groups responsible for 

developing trade sanctions and other responses to international aviation disputes. 

1976-1981: Faculty, HARVARD BUSINESS SCHOOL 

While on the faculty of the Harvard Business School, Mr. Kasper focused on the 

impact of alternative forms of government regulation on the management and 

performance of business organizations and on the study of national economic 

policies and strategies. Mr. Kasper authored a number of case studies and articles 

on various aspects of the transportation and telecommunication industries. 

While at Harvard, Mr. Kasper was also a member and active participant in the 

Harvard Regulatory Reform Project conducted under the auspices of the Kennedy 

School of Government. He also consulted with firms in the telecommunications 

and computer industries to help them anticipate and prepare for the impact of 

telecommunications deregulation on their businesses. 

1971-1976: Faculty, UNIV. OF SOUTHERN CALIFORNIA SCHOOL OF 

BUSINESS ADMINISTRATION 
iii 

While at USC, Mr. Kasper developed, administered and taught courses dealing with 

the control of business activities by means of direct government regulation, the 

enforcement of private contracts, and through the use of tort law. His research 

focused on the regulation of transportation, telecommunications industries and 

workplace safety. He also served as a member of the Faculty Senate. 

EDUCATION: 

Bachelor of Arts, Political Science, University of Kansas 

Masters in Business Administration, University of Chicago 

Juris Doctorate, University of Chicago 

TESTIMONY SINCE SEPTEMBER 2006 

US Airways, Inc., v. Sabre Holdings Corporation; Sabre Inc.; and Sabre Travel 

International, Limited. 

Expert Report regarding the evolution of Global Distribution Systems. The 

United States District Court for the District of New York, Civil Action No. 1:11-

cv-02725-MGC. 

United States of America, et al. v. US Airways Group, Inc., et al. 

Expert Report regarding proposed merger of American Airlines and US Airways. 

The United States District Court for the District of Columbia, Civil Action No. 

13-1236, 2013. 

In re: Pinnacle Airlines Corp., et al., Debtors. 

Expert Declaration, deposition and trial testimony regarding airline industry 

economics, finance and competition. The United States Bankruptcy Court for the 

Southern District of New York, Chapter 11, Case No. 12-11343 (REG), 2012. 

In re: AMR, Corporation, et al., Debtors. 

Expert Declaration, deposition and trial testimony in regarding airline industry 

economics, finance and competition. The United States Bankruptcy Court for the 

Southern District of New York, Chapter 11, Case No. 11-15463 (SHL), 2012. 

Air Transport Association of America, Inc. v. Export-Import Bank of the United 

States 
iv 

Expert Declaration and Supplemental Declaration regarding impact of subsidized 

financing for foreign carriers on U.S. airline competitiveness and employment. 

United States District Court For the District of Columbia, Civil Action No. 11-cv2024, November-December 2011.

Horizon Airlines vs. International Brotherhood of Teamsters, Local 1224 

Expert testimony before Ira F. Jaffe, Independent Arbitrator, In the Matter of the 

Interest Arbitration Between International Brotherhood of Teamsters, Local 1224 

and Horizon Air Industries, Inc. Seattle WA, September 2011.

United Technologies vs. Rolls Royce 

Expert Report in the Matter of Certain Turbomachinery Blades, Engines and 

Components Thereof, United States International Trade Commission 

Investigation No. 337-TA-751, June 24, 2011. 

Atlas Air Inc. and Polar Air Cargo, Inc. vs. International Brotherhood of 

Teamsters, Airline Division 

Expert testimony before Richard Kasher, Independent Arbitrator, In the Matter of 

the Interest Arbitration Between Atlas Air Inc. and Polar Air Cargo, Inc. and the 

International Brotherhood of Teamsters, Airline Division. Washington, D.C., 

December 2010.

Delta/AirTran Baggage Fee Antitrust Litigation 

Class Certification Expert reports and deposition testimony in Delta/AirTran 

Baggage Fee Antitrust Litigation, Civil Action File Number 1:09, md-2089-TCB, 

United States District Court, Northern District of Georgia, Atlanta Division, 

2010-2011. 

Allied Pilots Association vs. American Airlines, Inc. 

Expert analysis and arbitration testimony regarding economics of international 

codesharing and alliances. Grievance No.P-47-08. Hill Presidential: Joint Business 

Agreement, June 2009. 

Northwest Airlines, Inc., vs. Association of Flight Attendants, CWA. 

Expert analysis and arbitration testimony regarding the value of certain scope 

clause changes to the Northwest-Air Line Pilots Association (ALPA) collective 

bargaining agreement, April 2009. 
v 

Midwest Airlines, Inc. vs. Air Line Pilots Association and Association of Flight 

Attendants, CWA. 

Expert analysis and arbitration testimony regarding use of regional codeshare 

partners in U.S. airline industry, November 2008 and December 2009. 

United Air Lines, Inc. vs. Lisa Stout, individually and the marital community 

comprised of Lisa and Ray C. Stout 

Expert report and deposition testimony regarding potential economic damages 

resulting from termination of employment. United States District Court, Western 

District of Washington at Seattle, Civil Action No.CV07-3682-JCC. March 2009. 

United Air Lines, Inc vs. Air Line Pilots Association 

Expert report (with Darin N. Lee) and testimony regarding impact of pilot job 

actions. United States District Court, Northern District of Illinois, Eastern Division, 

September 2008. 

Innovative Solutions and Support, Inc. vs. J2, Joseph Caesar, James Zachary, 

Zachary Technologies, Inc and Kollsman, Inc. 

Expert report and testimony regarding damages arising from alleged 

misappropriation of intellectual property contained in aircraft components. United 

States District Court, Western District of Tennessee Western Division, Case No: 

05-2665-MIP. July 2007. 

Alaska Airlines, Inc., et al v. Los Angeles World Airports, et al 

Expert analysis of economic claims arising in a dispute over rates and charges 

imposed or airport tenants by Los Angeles World Airports. U.S. DOT, DocketOST-2007-27331, February 16, 2007. 

City of Baton Rouge et al vs. American Home Assurance Company And J. 

Calderera & Company, Inc. 

Expert analysis of claim for damages arising from delays in completion of an 

airport terminal project. January 2007. District19th Judicial District Court, Number 

493,788 Div: “D” State of Louisiana, January 2007.

Comments on Proposed Operating Limits at New York LaGuardia Airport 

Written comments on proposed operating limits at LGA. FAA Docket No. 2006-

25709, December 2006 and June 2008 (with Darin N. Lee). 

Comments on Notice of Proposed Rulemaking Congestion Management for John F. 

Kennedy International Airport And Newark Liberty International Airport 
vi 

Written comments (with Darin N. Lee) on proposed changes in operating limits and 

slot allocations at JFK and EWR Docket No. FAA-2008-0517, July 2008. 

In Re Delta Air Lines, Inc. et al., Bankruptcy Litigation 

Expert analysis and trial testimony regarding airline industry economics, finance and 

competition. The United States Bankruptcy Court for the Southern District of New 

York, Chapter 11 Case No. 05-17923 (PCB), 2005-2006. 

In Re Northwest Airlines, et al., Bankruptcy Litigation 

Expert analysis and trial testimony regarding airline industry economics, finance 

and competition. The United States Bankruptcy Court for the Southern District of 

New York, Chapter 11 Case No. 05-17930 (ALG), 2005-2006. 

BOOKS 

1) Deregulation and Globalization: Liberalizing International Trade in Air 

Services, Ballinger Publishers, Cambridge, MA, 1988. 

2) The U.S. Regional Airline Industry to 1996: Markets, Competition, and the 

Demand for Aircraft, The Economist Publications, London & New York, 1987. 

 
vii 

Appendix B: List of Documents and Information Sources 

Relied Upon 

PUBLICLY AVAILABLE DATA AND DOCUMENTS 

1. OAG database. 

2. U.S. DOT DB1B database. 

3. CATS database. 

4. United Mileage Plus data, 2014. 

CONFIDENTIAL DOCUMENTS 

5. United Airlines Landing Fee data. 

GOVERNMENT DOCUMENTS 

6. “In the matter of Petition for Waiver of the Terms of the Order Limiting Scheduled 

Operations at LaGuardia Airport,” DOCKET NO. FAA-2010-0109, Comment of the Port 

Authority of New York and New Jersey, March 22, 2010. 

7. “Order 5190.6B,” U.S. Department of Transportation Federal Aviation Administration Order 

5190.6B, September 30, 2009. 

8. “Comments of the Federal Trade Commission Staff of the Bureau of Economics to U.S. 

Department of Transportation,” September 14, 1994. 

BOOKS 

9. Alfred Kahn, The Economics of Regulation, John Wiley & Sons, 1970, Vol. II. 

10. Leonardo J. Basso and Anming Zhang, “An Interpretative Survey of Analytical Models of 

Airport Pricing”, Chapter 4, Darin Lee, Editor, Advances in Airline Economics, Elsevier, 

2007, Volume 2. 

PRESS RELEASES, NEWS ARTICLES, JOURNAL ARTICLES AND OTHER PUBLIC 

SOURCES 

11. “Proposal for a Council Directive on Airport charges,” 97/C 257/03, Official Journal of the 

European Communities, August 8, 1997. 

12. “Capacity Enhancement Plan,” Federal Aviation Administration, 1998. 

13. Comments of the Federal Trade Commission Staff of the Bureau of Economics to U.S. 

Department of Transportation, September 14, 1994. 
viii 

14. “The Low-Fare Evolution, Part II – Third Quarter 2002,” U.S. Department of Transportation, 

Office of Aviation and International Affairs, Aviation Analysis Domestic Aviation 

Competition Issue Brief Number 19, Appendix A, 2002. 

15. “Public Comments of the Department of Justice on the Show Cause Order, Joint Application 

of Air Canada, The Austrian Group, British Midland Airways Ltd, Continental Airlines, Inc., 

Deutsche Lufthansa Ag, Polskie Linie Lotniecze Lot S.A., Scandinavian Airlines System, 

Swiss International Air Lines Ltd., Tap Air Portugal, United Air Lines, Inc. to Amend Order 

2007-2-16 under 49 U.S.C. §§ 41308 and 41309 so as to Approve and Confer Antitrust 

Immunity,” Docket OST-2008-0234, June 26, 2009. 

16. “AIRLINE MERGERS: Issues Raised by the Proposed Merger of United and Continental 

Airlines”, U.S. GAO, May 27, 2010. 

17. “Phase II Report to the Special Committee of the Port Authority of New York and New 

Jersey,” Navigant, September 2012. 

18. Mitchell L. Moss and Hugh O’Neill, “A Port Authority that Works,” NYU Wagner Rudin 

Center for Transportation Policy and Management, March 2014. 

19. “Impacts of Continental Airlines Operations on the New York-New Jersey Regional 

Economy,” NERA Economic Consulting, November 2009. 

20. Delta Air Lines Q3 2013 Earnings Conference Call Transcript, October 22, 2013. 

21. “Slot Controlled Airports: FAA’s Rules Could be Improved to Enhance Competition and Use 

of Available Capacity,” United States Government Accountability Office, Report to the 

Subcommittee on Commerce, Science, and Transportation, U.S. Senate, September 2012. 

22. Port Authority 2013 Annual Traffic Report. 

WEB PAGES 

23. “3.0 Airplane Performance,” Boeing Co, July 1998, accessed September 7, 2014, 

http://www.boeing.com/assets/pdf/commercial/airports/acaps/7772sec3.pdf. 

U.S. SEC FILINGS 

24. AMR Corporation, Form 10-K for the Fiscal Year Ended December 31, 2013. 

25. United Airlines 2013 Fourth Quarter Earnings Release, January 23, 2014. 

26. United Airlines 2012 Fourth Quarter Earnings Release, January 24, 2013. 

27. United Continental Holdings 2011 Fourth Quarter Earnings Release, January 26, 2012. 

28. United Continental Holdings 2010 Fourth Quarter Earnings Release, January 26, 2011. 

 FINANCIAL STATEMENTS 
ix 

29. The Port Authority of NY & NJ Financial Statements and Appended Notes for the Year 

ended December 31, 2009. 

30. The Port Authority of NY & NJ Financial Statements and Appended Notes for the Year 

ended December 31, 2010. 

31. The Port Authority of NY & NJ Financial Statements and Appended Notes for the Year 

ended December 31, 2011. 

32. The Port Authority of NY & NJ Financial Statements and Appended Notes for the Year 

ended December 31, 2012. 

33. The Port Authority of NY & NJ Financial Statements and Appended Notes for the Year 

ended December 31, 2013.