American Airlines says it won't renew O'Hare lease, jeopardizing expansion deal

CHICAGO (WLS) -- American Airlines says it's looking for ways to move forward with the massive O'Hare expansion plan despite concerns it favors rival United.

Mayor Rahm Emanuel announced the $8.5 billion O'Hare expansion project earlier this week. Under the plan, funding for the expansion is to come from new lease agreements with American and United Airlines

But in a statement, American Airlines says it, "Cannot sign the lease in its current form because of a secret provision, inserted at the last minute, awarding additional gates to United."

American says it would sign the lease if it did not include this provision.

United Airlines said in a statement, "We reached an agreement with the city for five additional gates in 2016. Furthermore, this agreement is no different than the one reached by American Airlines and the City in early 2016 for five additional gates. American Airlines has been aware of our agreement for over a year and has worked to block the implementation at every opportunity. As Chicago's hometown airline, we are fully committed and excited about the opportunity to grow here in Chicago and make O'Hare a world-class airport."

Mayor Rahm Emanuel did not seem fazed by the threat.

"You know, there is always this before. You have seen this kind of accusation before, you know that. This isn't new," Emanuel said.

After introducing the expansion plan to the City Council, the mayor disagreed with American's take, and said the deal is about securing Chicago's future.

"You have multiple airlines agreeing. Everybody sees the opportunity of a level playing field to compete - I want to be clear, I am not picking one airline versus any of the other airlines," he said.

The O'Hare expansion project includes a new Global Hub that would replace Terminal Two. There would also be new underground walkways to connect a pair of satellite terminals.

The multi-year plan would increase gate numbers by 25 percent, expanding Terminals One, Two and Five.

In their full statement, American Airlines said:

"American Airlines is excited about seeing O'Hare transformed into an airport that sets the global standard in airline passenger experience and efficient operations. And, after 18 months of multi-lateral, transparent negotiations, we were looking forward to supporting the new lease. But American cannot sign the lease in its current form because of a secret provision, inserted at the last minute, awarding additional gates to United.

Today, Chicago is extraordinarily well positioned with three carriers operating hubs and competing aggressively against each other. However, the United gate deal would undermine competition, allowing the largest airline at O'Hare to expand its size advantage for years into the future. Thus, the United gate deal creates a clear winner, United, and clear losers: namely, competition, Chicago travelers and American Airlines.

We would sign the lease if it did not include this provision. Alternatively, we are prepared to compromise. Indeed, since learning of the United gate deal less than two weeks ago, American has sought to re-level the playing field by urging the City to accelerate the construction of three additional gates, and award those to American. To date, the City has dismissed that approach without explanation. We encourage city leaders to fix the lease and ensure competition remains vibrant at O'Hare."