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LaHood mediates meeting between Chicago mayor and American, United

LaHood mediates meeting between Chicago mayor and American, United

By Aaron Karp | February 10, 2011

9

Chicago Mayor Richard Daley met Wednesday with United Airlines Chairman, President and CEO Jeff Smisek and American Airlines Chairman and CEO Gerard Arpey in Washington, where US Transportation Secretary Ray LaHood served as a mediator in talks aimed at resolving the dispute between the city and the carriers over Chicago O'Hare expansion. UA and AA last month filed a lawsuit in Illinois to stop the city from moving forward with the second phase of ORD expansion, arguing that the city government failed to get clearance from the carriers before approving $3.4 billion in modernization projects at the busy airport (ATW's Airports Today, Feb. 7).

The crux of the dispute is whether the airlines, by far ORD's two largest tenants, are entitled to have veto power over large capital expenditures at the airport. Prior to the Washington meeting, Daley told the Chicago Sun-Times, "What the airlines are saying is, 'Wait 'til 2019 to do any work' ... They want us to delay everything until 2019. [But] in 2019, we lose all our federal permits. We lose federal money. And it takes then three or four years to get the permits and start building. That would be 2023 or 2024 to start re-building O'Hare field."

After the meeting, he said in a statement, "The airlines and the city continue to meet and I look forward to a solution that will benefit everyone involved." He characterized the talks as "candid."

LaHood told reporters, "The Dept. of Transportation has made a huge investment in O'Hare modernization, almost $1 billion. And so I thought it was important that I ask the CEOs of United and American, along with Mayor Daley, to come to my office. We had a very, very extensive discussion and those discussions are going on."

AA and UA said in a joint statement that the carriers and Daley were "unfortunately unable to reach an agreement that would permit us to suspend our litigation seeking to stop the city from proceeding without … without our legally required notice and approval."

Discuss this news 9

09 Feb22:26

Why do AA and UA think they

By Patrick

Why do AA and UA think they own ORD? Chicago owns ORD and should be able to determine what is best for the airport and the city. AA and UA just don't want the possibility of additional competition coming into the airport. ORD needs expansion and it needs to be done now before travel demand significantly increases again. Otherwise we are going to be sitting here with a capacity-restricted airport that causes nationwide delays and can't compete with other airports.

Get over yourselves, AA and UA.

10 Feb00:52

In this case AA and UA have a

By John

In this case AA and UA have a valid legal argument based on how the orginal agreement was written. It does give both carriers say in capital expenditures that increase their fees.

Short sighted agreement in the past the city reached that is comming back to bite them.

But, i do agree ORD needs to proceed with the runway expansion. The new terminal not so much. Hopefully they will come to a compromise.

10 Feb02:31

UA and AA would be nuts to

By Bruce Sanchez

UA and AA would be nuts to want to change the status quo, and they would probably have to pay a large part of the cost in increased fees too. Let's face it--less competition means they might actually make a profit, which is what the ticket buyers are not opposed to. If only Exxon and Chevron and FedEx had to manage on the margins that the airlines do, we'd all be richer.

10 Feb05:56

If UA and AA do not like it

By GP

If UA and AA do not like it then I suggest they move their hub somewhere else that they do like.
They are but a user not an owner. Might be better if they were the owner but whilst they are not put up and shut up.

10 Feb08:31

to Patrick: Yes, Chicago can

By Anonymous

to Patrick: Yes, Chicago can do all it wants within any legal contracts it has. What UA and AA are saying is that they have a say (based on the long-term lease agreements they have with ORD) when any capital project that increases the fees they pay at ORD. That is the crux of the issue, not whether ORD can do an enhancement or not. Yes, it is always about competition.

10 Feb08:38

The arrogance of Big

By Dave

The arrogance of Big Government (BG) was well illustrated by LaHood's statement, "The Dept of Transportation has made a huge investment in ORD..." DOT didn't make the investment - the American People made the "investment"!! It's OUR money LaHood. ...
UA and AA should have a BIG say in spending money that THEY are on the hook for. Get BG out of private enterprise!

10 Feb11:05

Legally AA & UA have a say in

By Jeff

Legally AA & UA have a say in Daley's planned expansion. The suggestion that AA & UA move sounds nice, but would instantly negate the need to expand O'Hare as they are why the airport is so busy. Consider the fact that US Airlines are just starting to recover financially and Chicago & US Government want to them to sign on to higher fees for the expansion, which means you the traveling public will ultimately be paying more for tickets.

10 Feb11:36

Due to the design, any

By Anonymous

Due to the design, any addition of more parallel runways will do very little for delays at this time at ORD. If they had elected to put in an additional runways diagonal to the main runways, this may allieviate some delays on a few days a year with unusual weather conditions, but this is not their plan; they want 6 parallel runways at ORD. The capacity is fine now if another carrier wants to come in and compete, there's room! Jet Blue offers flights and Virgin America is eyeing the market. What Chicago needs is more roads and transportation options in out and around Chicagoland at this time, not runways. The traffic in Chicago is rated the worst in the nation right now, tied with Washington DC. The public trasportation schedules stink. Here's a place we could use some money.... Maybe we could get the feds to redirect the money to somewhere useful instead!!!!!!!!

11 Feb13:28

Readers of ATW, True the

By Gene

Readers of ATW,

True the airlines have seen dark days in the past but they are turning the corner due to cuts in capacity and austerity measures. The bonds that the airlines are being asked to back (which is their portion of the O'Hare modernization plan) will not immediately come due, if they put aside money for bond payment and invest it they will be in good shape to pay.

There is a symbiotic relationship between the city and UA and AA it is in both their interests to quickly resolve this issue. If the airlines don't want a 4th terminal on the western edge fine (5th terminal being international); revise the plan, but don't scrap the whole thing.

Agreed that Chicago has other transportation related issues than the airports but that is not an issue for the FAA or the Chicago Dept. of Aviation as it is not their area of responsibility.

As far as the advantage to parallel runways ask ATL if they are a waste of money.

I fear the airlines just simply want someone else to pay for infrastructure improvements and for them to reap all the profit...

Respectfully, Gene

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