Emanuel’s $8.5B O’Hare Airport makeover draws American Airlines’ ire
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Mayor Rahm Emanuel vowed Wednesday to forge ahead with his $8.5 billion makeover of O’Hare Airport, even after it hit the legislative runway with a thud when American Airlines declared opposition, citing what it called a secret, eleventh-hour deal to award five more gates to hometown United Airlines.
American argued that 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,” the American statement said.
“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.”
United spokesman Charles Hobart said it’s “disingenuous” for American to claim that a secret deal was cut to favor United, Chicago’s biggest private employer.
“Our agreement with the city for five additional gates was made more than 18 months ago in response to American’s deal with the city for five additional gates,” Hobart wrote in an email to the Sun-Times. “American has been aware of our agreement for over a year and has worked to block the implementation at every opportunity.”
Emanuel said he will push forward on a massive makeover that will allow O’Hare to “leapfrog the competition.”
“I’m not picking one airline vs. the other or any of the airlines. … This was not about the competition between those two airlines. It was about the competition between Chicago and all of the other cities and we’re securing that,” the mayor said.
“It will move forward and I believe that American will see — like all of the other airlines already see — you will grow and compete. It’s a level playing field.”
Emanuel made no apologies for the even-steven deal that gives United five additional gates.
“I’ll invite you all out in April when we open up the five new gates for American,” the mayor said.
“Some people will look at litigation. I’m gonna look at aviation and secure a future for the city of Chicago. … This agreement allows the other airlines — Delta, Spirit, etc. —to grow and keep all of the others honest when it comes to pricing. If anything, the consumer gains by that healthy competition that did not exist before.”
Undeterred by American’s opposition or confident he can overcome it, Emanuel introduced the plan at Wednesday’s City Council meeting.
It calls for demolishing Terminal 2 and replacing it with a new “global terminal” shared by United and American Airlines that would accept both domestic and international flights.
The massive, multi-year makeover also calls for dozens of new gates and additional concourses. O’Hare would become the first so-called “global alliance hub” in the nation that allows domestic airlines and the international carriers with which those domestic airlines partner to all be located in the same terminal.
No longer would arriving passengers connecting to international flights endure the delay and inconvenience of riding the people mover or shuttle buses to an international terminal not within walking distance.
A top mayoral aide, who asked to remain anonymous, argued that opposition from O’Hare’s second-largest carrier is not a deal-breaker.
“It’s not a business deal where you have to have a meeting of the minds. This is a structure we’re willing to put in place for any airline that wants to fly here and have a lease,” the Emanuel aide said.
Anyone can file a lawsuit, but, “no judge can or will enjoin City Council action moving forward with Chicago’s future,” the aide said.
“American has been a tough negotiator. They didn’t get everything they wanted. They’re gonna have to decide if they want to use O’Hare as a non-signatory and pay [a modest increase in] fees and charges and have no say in how the airport is run and no preferential-use gates. No right to club space. It would be economically irrational to refuse to sign a lease and fly to O’Hare as non-signatory airline,” the Emanuel adviser said.
The City Council’s Latino Caucus made matters even more uncomfortable for Emanuel when it comes to the bonanza of jobs and contracts tied to the O’Hare project.
Citing the city’s “embarrassing track record” of Hispanic hiring, the Caucus declared, “If our Latino community is not represented in the form of jobs and contracts, this deal is a non-starter.”