American, United Airlines in Spat Over O'Hare Expansion Plans
The $8.5 billion plan to revamp Chicago O'Hare Airport (ORD) hit an unexpected obstacle today when American Airlines said it would not sign the lease for the project in its current form.
American said in a statement that "a secret provision, inserted at the last minute, awarding additional gates to United," was preventing the airline from signing on. According to the statement, American had been negotiating with O'Hare for 18 months and was going to support the new lease before the extra United gates were added. The airline says it learned of the extra United gates two weeks ago.
American went on to say that both its airline and Chicago passengers would be "clear losers" in the agreement. "The United gate deal would undermine competition, allowing the largest airline at O'Hare to expand its size advantage for years into the future."
Chicago-based United Airlines accused American of being "disingenuous," Reuters reported.
"We reached an agreement with the city for five additional gates in 2016," a United representative tells TPG. "American Airlines has been aware of our agreement for over a year and has worked to block the implementation at every opportunity."
Meanwhile, American is urging Chicago to build and give the airline three additional gates, although it says the city has rejected that suggestion.
The O'Hare expansion deal is an eight-year plan that would feature a new "Global Terminal," and add more gates and concourses to reduce gridlock. Terminal 2 would be torn down completely to make room for the Global Terminal, and Terminals 1, 3 and 5 would be renovated. The expansion would add 72% more terminal space — from 4.3 million square feet to 7.4 million.
American said it will sign the lease if the United provision is dropped or if another compromise can be reached. Chicago Mayor Rahm Emanuel will present the details of the expansion at a City Council meeting today.
