United and American Airlines are set to collaborate on a new "global terminal" at O'Hare Airport, handling domestic and international flights. However, both carriers are now seeking Mayor Brandon Johnson's intervention to modify the plans. The airport's expansion project, including the global terminal and two satellite concourses, is currently $1.5 billion over budget.
Alderman Matt O'Shea, the City Council's Aviation Committee chairman, revealed that high-stakes negotiations have been ongoing for months. United and American, once rivals, are now aligning in their request to scale back or delay the project. Their primary concern is the substantial cost increase since the pandemic, with a decline in air travel compared to 2019.
Notably, there are worries that United may reconsider its corporate headquarters location in Chicago, a threat initially made in 2018. The major phase of O'Hare's work is reportedly 24% over budget, and construction is yet to commence on key elements, including the global terminal designed by architect Jeanne Gang.
Possible options include revising the design to cut costs, with some in the industry criticizing it as an expensive "Taj Mahal." Alderman O'Shea emphasized the importance of modernizing O'Hare and Midway, citing the need to stay competitive, especially as other airports aim to attract passengers and strengthen their hubs.
United and American Airlines confirmed the $1.5 billion budget overrun, expressing concerns about escalating costs as construction progresses. While they remain committed to modernizing O'Hare, they stress the necessity of controlling costs, as airline ticket taxes, landing fees, and other airport revenue sources fund the project.
Aviation Commissioner Jamie Rhee refrained from disclosing specific details about the carriers' demands but affirmed the commitment to O'Hare's growth and development. Mayor Brandon Johnson's Chief Operating Officer, John Roberson, mentioned ongoing discussions with the airlines, emphasizing the value of the partnership.
Former Mayor Rahm Emanuel urged Mayor Johnson to uphold the 2018 agreement, emphasizing the benefits of a modernized O'Hare. He argued that Chicago should honor the contract, given the increasing demand for air travel globally.
Despite concerns raised by United and American about project costs, the overall outlook for aviation is more positive than during the pandemic. Passenger loads have returned to pre-pandemic levels, although business travel's recovery is slower than leisure travel.
The joint request by United and American to slow down the expansion marks a reversal from their adversarial stance in 2018. At that time, American accused Emanuel of favoritism towards United in gate allocation, leading to threats of legal action and hub reduction at O'Hare.
The O'Hare expansion project, initially an $8.7 billion endeavor, is now estimated at $12.1 billion, with delays and potential scaling back reported during the early months of the pandemic. Mayor Lori Lightfoot inaugurated a new terminal extension in January 2023, highlighting increased capacity and amenities to improve the passenger experience.
As negotiations continue, the city must decide whether to proceed with the planned expansion, modify the design to reduce costs, or address United and American Airlines' concerns.
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