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$8.5B Chicago O'Hare Expansion Moving Forward

Tuesday, April 3, 2018

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On Wednesday (March 28), the City Council of Chicago approved the $8.5 billion expansion for O’Hare International Airport, marking the end of a previous dispute between the airport’s two largest carriers.

According to the Chicago Tribune, the project will be the largest and most expensive terminal revamp in the airport’s 73-year history. The update includes plans to add several million square feet of terminal space, and to tear down an existing terminal.

Airline Dispute

Previously, United and American—the airport’s two largest airlines—disagreed over the number of gates that would be assigned to each company. In February, American accused United of trying to enter a last-minute “secret deal” with the city to acquire additional gates.

To slow the construction plan down, American created a website to gain support from airport employees and passengers, alleging that the “deal between the city and United limits consumer choice, raises airline fares and stifles competition.”

Eric Salard, CC-BY-SA-2.0, via Wikimedia Commons

On Wednesday (March 28), the City Council of Chicago approved the $8.5 billion expansion for O’Hare International Airport, marking the end of a previous dispute between the airport’s two largest carriers.

At the time, Deputy Mayor Bob Rivkin scoffed at American’s threat to file a lawsuit, shrink its dual-hub at O’Hare or do both. Rivkin noted that even though American was looking for a couple more gates, “in the end, they’re going to be a signatory because it’s the only rational thing for them to do.”

Even though there was initially a lack of support from American in terms of the project, Rivkin said the risk was “very low” that this would make the city pay a higher interest rate, part of the $4 billion to start the ball rolling on the terminal revamp.

The airlines resolved the dispute earlier this month, hinging on Chicago speeding up the construction of three common-use gates that will be available for use around the same time United gets another five gates. On top of this, these three gates favor American, as they’re located at the end of the airline’s concourse.

Revamp Details

According to the Chicago Tribune, 55-year-old Terminal 2 will be torn down to make room for a new global terminal with wider concourses and gates that could accommodate larger aircraft intended for international flights. Terminals 1, 3 and 5 are set to be renovated, with two new satellite concourses to be built and connected to the new global terminal via an underground pedestrian tunnel.

All accounted for, more than 3.1 million square feet of terminal space would be added, a 72 percent increase over the current 4.3 million square feet.

Once construction of the air field is completed, O’Hare will operate six east-west runways and two diagonal runways, resulting in dozens of new gates opening over the next eight years. The expansion is also slated to include a new parking and security screening facility for airline employees, a Terminal 5 parking garage and three new baggage systems.

Airport Highlights

O’Hare is listed consistently as one of the world’s best-connected and busiest airports, but those rankings rely heavily on Chicago’s large number of regional jets, noted Aviation Commissioner Ginger Evans in an interview with the Tribune.

In light of the approval by City Council late last month, the leases for the terminals include higher rents and landing fees that will bankroll the $4 billion in general airport revenue.

American Airlines accounted for 35.5 percent of passengers at O’Hare in 2016, with United clocking in at 44.5 percent, according to Reuters. According to the Chicago Sun-Times, O’Hare would become the first so-called “global alliance hub” in the nation, meaning domestic airlines and their international partners will be in the same terminal.

   

Tagged categories: Airports; Business matters; Project Management; Terminals

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