Chicago, airlines reach deal on O'Hare expansion

March 15, 2011 4:22:41 AM PDT
The City of Chicago has struck a deal with two major airlines on expansion plans for O'Hare International Airport. The agreement is worth more than a billion dollars.

Chicago and its airline partners, United and American, have been in a somewhat acrimonious legal fight over O'Hare expansion. But rather than continue to duke it out in the courtroom, both sides have found a piece of common ground, and the heavy hitters came together Monday to thank each other.

There's nothing quite like a compromise to produce lots of thank yous. From The Secretary of Transportation, the airline chiefs, the state's two Senators, and the mayor.

"There was a lot of comprises there. The compromise is the best for the airport, the airlines and the traveling public," said Mayor Daley.

So here is the compromise: The lawsuit goes in the wastebasket. The city gets to move forward with O'Hare expansion. But it's going to change priorities.

A brand new runway on the south side of the airport -- that required the demolition of hundreds of homes -- was to be the last step in the expansion plan. Now, instead, it will come next, along with another parallel runway that will be completed with the relocation of St. John's cemetery.

A new runway planned for the north side of the airfield that was supposed to be next now gets put on hold. It will get built only if air traffic numbers show a need for it. And, that's what the airlines want -- some control over what they'll pay for O'Hare modernization.

"I see a point in time when the entire O'Hare modernization plan will be completed, We have always supported it, and I know our counterparts at American agree. It's just a question of timing," said Jeff Smisek, United CEO.

But if air traffic doesn't justify the need, the airlines have the ability to say "no" to that new northern runway.

So, what made the compromise work? Well, of great significance, the federal government sweetened the pot with $150 million above what's already been pledged for the largest airport expansion project in the country. Where does that new money come from?

"The FAA has got discretion, but there's only so much in the pot, so what Chicago gets, it's quite likely other airports don't," said Joe Schwieterman, of the Chaddick Institute at DePaul University. "There's a lot of partisan politicking in Washington, so LaHood had to spend down a little capital to bring home a check for us."

So the discussion on whether to build another new runway on the northern half of the airfield, along with extending an existing runway there, gets put off until 2013.

The new southern runway has a tentative finish date of 2016.

Mayor Daley leaves office with his signature project moving forward, and the airlines get a greater level of financial control over O'Hare expansion.

Chicago's new mayor says Monday's agreement is a victory for the economic future of the city, state and region.