American Airlines and Chicago Strike Agreement on $8.5 Billion O’Hare Deal

Mar 15, 2018

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American Airlines and Chicago Mayor Rahm Emmanuel have reached an agreement to move forward with the $8.5 billion deal to overhaul O’Hare International Airport (ORD).

The city of Chicago agreed to give American three new gates as part of the deal, The Chicago Tribune reports. The concession comes after a feud between American and United for the number of gates each airline was assigned during the expansion.

Shortly after reports of the extensive remodel of ORD were made public, American revealed it would not agree to the plan, saying Chicago-based United was allotted more gates and, therefore, more influence. “The United gate deal would undermine competition, allowing the largest airline at O’Hare to expand its size advantage for years into the future,” American said of the original deal in a statement.

According to American’s statement, the airlines had spent 18 months negotiating lease agreements for the expansion plan, and at the “last minute,” United was awarded five more gates. (United disputes this version of events).

American said the only way it would sign its new lease was if the United provision is dropped or if “another compromise” could be reached. After two weeks, Mayor Emmanuel agreed to speed up construction of three additional gates for American.

“We are strongly supportive of this agreement because it is best for the city of Chicago, our 9,300 Chicago team members and our customers,” American Airlines CEO Doug Parker said of the new deal in a statement. United said it also supports this latest version of the lease agreement.

Like all the gates in O’Hare’s expansion, the three new American gates will not be operated exclusively by American, but they will benefit the airline because of their location on the L concourse.

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.

*This article has been updated with the correct amount of $8.5 billion, not $8.5 million.

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