The City Council’s Hispanic Caucus is demanding five years worth of hiring and contracting information from both United and American Airlines that the caucus chairman says will be used to determine whose side to take in the high-stakes battle over new gates at an expanded O’Hare International Airport.
Hispanic Caucus Chairman Gilbert Villegas (36th) made the demand during closed-door, back-to-back briefings Tuesday with both carriers on the $8.5 billion O’Hare expansion plan that American alone opposes. United CEO Oscar Munoz attended his airline’s meeting with Hispanic aldermen — a surprise move that underscores the stakes.
With aldermanic briefings scheduled for Thursday and an Aviation Committee meeting expected next week, United and American want Council allies in their battle over the five additional gates awarded to United and American’s demand for three more gates.
The Hispanic Caucus was more interested in pushing its agenda: a bigger share of the jobs and contracts tied to the O’Hare project.
To bolster its case with Hispanic aldermen, American has hired lobbyists Mike Alvarez, who is close to Mayor Rahm Emanuel, and Victor Reyes, a former Daley political operative who ran the now-defunct Hispanic Democratic Organization at the center of the city hiring scandal.
“It’s not what they’re gonna do, but what is their past track record?” Villegas said, citing the city’s “embarrassing track record” of Hispanic hiring.
“I’ve asked for minority, women and veteran business spend on public and private projects for the past five years and the make-up of their workforce nationally and locally. It will be a factor” in whose side the Hispanic Caucus takes.
Emanuel wants the O’Hare makeover on a legislative fast-track. In the way, however, is American’s thinly-veiled threat to sue, reduce O’Hare operations, or both to protest what American has called a secret, eleventh-hour deal giving hometown United five more gates.
To start the ball rolling, the mayor is also asking aldermen to authorize $4 billion in borrowing, to be paid off through the new airline leases that include higher landing fees, gate and terminal rents, concessions and airline ticket taxes.
American’s proposed compromise — to accelerate construction of three more American gates in Terminal 3 by 2021, the same year United is to get its five gates additional gates — has been rejected by the mayor’s office.
“We are considering a host of options. We haven’t nailed any one down,” American spokesperson Leslie Scott said Wednesday.
Is O’Hare’s second-largest carrier is considering legal action?
“We don’t have to make that decision right at this very moment,” Scott said. “Right now what we’re focused on is making sure people understand why we think this is an unfair and anti-competitive lease and seeing if we can get that solved.”
City Hall believes it has American over a barrel. A top mayoral aide has argued the airline’s only alternative is to use O’Hare as a non-signatory, meaning increased fees and charges and no say in how the airport is run, no preferential-use gates and no right to club space.
Scott argued there is a third option for American: reduced operations at O’Hare.
“If one carrier gets too much bigger than the other, it’s more difficult to compete. And if we can’t compete, we would have to see what our place looks like in the future. It could look smaller,” Scott said.
“It makes the airport less competitive and the people of this city deserve an airport that has a dual-hub structure. It gives them more destinations, more flights and lower fares. Putting one airline at a distinct disadvantage over another is anti-competitive and that could have a bad outcome for the city.”
United spokesman Frank Benenati said Munoz appeared before Hispanic Caucus “to share our commitment to O’Hare modernization, economic growth and job creation…We are fully committed and excited about the opportunity to grow here in Chicago.”
The mayor’s ambitious plan calls for dozens of new gates and additional concourses. Terminal 2 would be razed, replaced with a new “global terminal,” shared by United and American, handling both domestic and international flights.
O’Hare would become the first so-called “global alliance hub” in the nation, That puts domestic airlines, and the international carriers partnered with those airlines, in the same terminal. Arriving passengers connecting to international flights would not longer endure the delay and inconvenience of riding the people mover or shuttle buses to the existing stand-alone international terminal, which is not within walking distance.