Northwest Airlines v. Federal Aviation Administration

The Memphis-Shelby County Airport Authority (airport) identified four desired projects to improve its infrastructure and, therefore, improve its capacity. To fund these projects, the airport intended to impose a passenger facility charge of $3 on each passenger who traveled through the airport. The airport consulted with all the air carriers operating at the airport about the four projects and the possible fee. The airport then applied to the Federal Aviation Administration (FAA) (defendant) for permission to collect the charges. In case one of the four primary projects failed to get final clearance after the funds were collected, the airport also included an alternate project aimed at reducing the airport’s noise impact. The airport had not consulted with the airport’s carriers about the proposed alternate project. Northwest Airlines, Inc. (Northwest) (plaintiff) objected to the airport’s application. Northwest used the airport as a hub and claimed that the extra fees would harm its ability to compete with other major airlines, ultimately harming air-carrier competition. The FAA approved the airport’s request to begin collecting the charges to fund the four primary projects and the alternate project. Northwest sued the FAA to overturn the decision, arguing that the FAA (1) should have considered the application’s negative impact on Northwest’s ability to compete and (2) should not have approved the alternate project because the airport had not consulted with the air carriers about that project.