CHICAGO (CN) – United and American Airlines sued Chicago, claiming the city approved a multibillion-dollar expansion of O’Hare Airport without giving the airlines a vote, to which their lease entitles them.
The airlines say the city is contractually obligated to let them weigh in before moving ahead with Phase 2 of the $6.6 billion O’Hare Modernization Program.
“These kinds of capital projects require airline scrutiny and approval because they increase airport costs which the airlines pay for through landing fees and other rates and charges imposed by the city,” according to the complaint in Cook County Chancery Court. “Although the city’s position presupposes a ‘blank check’ from the airlines, the parties agreed in their contracts to a ‘check and balance’ that prohibits the city from saddling O’Hare with new capital projects and billions of dollars of debt without airline approval.”
The airlines say the $3.36 billion “completion phase” would slap carriers with higher landing fees and other charges as airlines struggle through difficult economic times.
A substantial chunk of project funds would come from “massive, unauthorized bond offerings,” the airlines say, while the d pays nothing.
Construction of Phase 1, a project with substantial operation and maintenance costs, has yet to be completed due to litigation over the city’s plan to relocate St. Johannes Cemetery in Bensenville to make room for a new runway.
The city’s view of the modernization project is widely at odds with the airlines’. Chicago claims that “a modernized O’Hare means the creation of 195,000 more jobs, and another $18 billion in annual economic activity.” The city claims the modernization project “is expected to save the airlines approximately $370 million and passengers $380 million a year.”
“We remain willing to discuss modernizing O’Hare with the airlines that serve the airport; however, timing is essential,” Chicago Aviation Commissioner Rosemarie Andolino said in a statement. “The opportunity to realize the benefits for the region and naval aviation system cannot be lost.”
United and American seek declaratory and injunctive relief.
They are represented by Samuel Isaacson with DLA Piper.
O’Hare Airport is named for Chicago native Edward “Butch” O’Hare, a naval aviator who won the Medal of Honor and died in World War II.