The 2nd U.S. Circuit Court of Appeals said New York's law -- the first of its kind in the country -- interferes with federal law governing the price, route or service of an air carrier.
The law was passed after thousands of passengers were stranded aboard airplanes for up to 10 hours on several JetBlue Airways flights at Kennedy International Airport on Valentine's Day last year. They complained they were deprived of food and water and that toilets overflowed. A month later, hundreds more passengers of other airlines were stranded aboard planes at JFK after a daylong ice storm.
The law was challenged by the Air Transport Association of America, the industry trade group representing leading U.S. airlines.
The court said that while the goals of the law were "laudable" and the circumstances prompting its adoption "deplorable," only the federal government has the authority to pass such regulations.
"If New York's view regarding the scope of its regulatory authority carried the day, another state could be free to enact a law prohibiting the service of soda on flights departing from its airports, while another could require allergen-free food options on its outbound flights, unraveling the centralized federal framework for air travel," the court wrote.
Assemblyman Michael Gianaris, the prime sponsor of New York Airline Passenger Bill of Rights, said in a statement that the ruling "is a disappointment to anyone who has suffered at the hands of airlines that care more about profits than their customers."
"This is far from over," the Democrat said. Options for proponents of the law include an appeal, a new law or putting pressure on the federal government to create similar rules for long-delayed flights.
In a statement, the air transport association said the ruling vindicates its position that airline services are regulated by the federal government and that a "patchwork" of state and local measures would not benefit customers.
During appellate arguments earlier this month, Seth Waxman, a lawyer for the trade group, said a dozen other states and Congress were considering laws similar to New York's.
A recent federal report showed that about 24 percent of flights nationally arrived late in the first 10 months of last year, which was the industry's second-worst performance record since comparable data began being collected in 1995.
Kennedy airport had the third-worst on-time arrival record of any major U.S. airport through October, behind the New York area's other two major airports, LaGuardia and Newark, according to the report.