Daley O'Hare plan gets off ground

September 23, 2000

BY FRAN SPIELMAN AND ROBERT C. HERGUTH STAFF REPORTERS

With a promise from City Hall to pick up more of the tab, American Airlines has signed on to Mayor Daley's $3.2 billion plan for new terminals and gates at O'Hare Airport.

United Airlines has an oral agreement with city officials and is a week away from putting it in writing, sources said Friday.

The agreements virtually ensure that the ambitious World Gateway plan will proceed largely as outlined by Daley on the eve of his 1999 re-election. They also guarantee that United and American will remain equal partners at O'Hare--each with eight new gates.

"Right now, we have an agreement in principle," Chicago Department of Aviation spokeswoman Monique Bond said. "We feel confident that we're moving forward, and we are pretty optimistic about the finality of the agreement."

During sometimes-contentious negotiations, the city agreed to contribute more airline passenger tax revenues, sell United 50 additional acres of airport property near its planned headquarters at below-market rate, and phase in part of the work, although the initiative still could be completed by the original target of 2008.

In exchange for the city's perks and undisclosed amount of money, the two carriers have agreed to a system in which they no longer will have exclusive control over gates. Each would get eight "preferential" gates in the new terminals. But they wouldn't keep them if they didn't use them, and four other gates would be opened to other airlines, sources said.

"The whole idea is to maintain the current parity between United and American," one City Hall source said. "Being competitive, both airlines were trying to jockey to get an advantage. And the city's stance was, we had to retain the current parity or we're not going to retain both of them here."

Airline leaders had been balking at the price tag in recent months.

They were upset about having to cover three-quarters of the expense without the benefit of adding new runways, and angry with the city's idea of putting new restrictions on gates. There was talk about scaling back and phasing in the project, which calls for building two new terminals, reconstructing parts of others and adding at least 20 gates and two inspection facilities.

The city's decision to increase the level of ticket tax revenues devoted to World Gateway means there will be less money available for other airport projects, possibly including soundproofing. It also may mean the city will have to raise ticket taxes by $1.50--the full amount allowed by law.

Chicago Aviation Commissioner Thomas Walker said the city needed to change the way gates are assigned to use passenger tax revenues, under a recent federal requirement. And gate sharing was critical in the mayor's eyes for reducing delays.

Walker described the current plan, which will be unveiled formally at Oct. 5 public hearings, as "the basic concept that was described over a year ago."

No decision has been made on a costly plan to relocate the heating and cooling plant for a new Terminal 4. Instead, the project will be phased in, with a Terminal 6 and extended concourses built first, sources said.

When United got wind that American had signed on, United Chairman and CEO James Goodwin rushed to arrange a meeting with Daley this week. Those talks, and the American deal, provide a rare piece of good news for O'Hare in recent weeks.

Last week, Daley came under fire from Sen. John McCain (R-Ariz.), who said politics were to blame for O'Hare's horrid flight delay situation. He called for a new runway, a new airport or both.

Delays caused by bad weather on the East Coast and in the Pacific Northwest and Florida caused a series of delays at O'Hare on Friday, and at least one airliner reportedly was hit by lightning, Chicago Aviation Department spokeswoman Monique Bond said.

Statistics released by the Federal Aviation Administration on Friday show O'Hare and Midway airports had fewer delays in August than in July, although they experienced more than during the previous August.