Never mind fair, is it anti-competitve and therefore illegal?
No,it isn't.
The CAA has powers under the Airports (Groundhandling) Regulations 1997, which implemented the European directive on access to the groundhandling market at Community airports.
Airports with over 2 million passengers a year cannot limit the number of self handlers or third party suppliers of ground handling services without permission from the CAA. Airports can apply to the CAA for the number of suppliers or self-handlers to be limited.
PIK's numbers have fallen below this, so it's not applicable ; therefore, by deduction, the management can do as they like.