Chicago’s two main airlines have signed off on the city’s proposed changes to a massive, delayed rebuild at O’Hare International Airport, clearing a path forward after months of negotiations.
In separate statements Friday afternoon, both United and American airlines said they supported the plan outlined by the city in early April to change the order of construction on a new Global Terminal and two nearby satellite concourses. Initially, the plan was to build the two satellite concourses first, which would have added gate space for airlines to use while aging Terminal 2 was rebuilt as a gleaming new Global Terminal, but under the April plan the city proposed moving the Global Terminal up in the construction order.
Under the current plan, United said, the city’s aviation department can move forward with construction on the first satellite concourse, while planning a phased construction of the Global Terminal. If enough money is left over, the aviation department would move forward with construction on the second satellite concourse and the tunnel connecting the two concourses, United said.
The two airlines, who are footing much of the construction bill, had pushed for the change in the order of work, seeking to ensure the new terminal wasn’t threatened by budget overruns. Their approval now sets the stage to move forward with a key piece of the airport rebuild, which has been behind schedule and mired in months of contentious negotiations as the carriers pushed back against rising construction costs.
“We are pleased that Mayor Johnson and his aviation department have put forth a phasing plan that will ensure that (project) funds are first spent on the mission-critical portions of the program — the O’Hare Global Terminal and Satellite 1,” United said in a statement. “The Global Terminal has always been the centerpiece of this program and the crucial piece needed to ensure Chicago maintains its status as a global hub. Under this new phasing plan, we can deliver the most impactful elements of the modernization project the quickest.”
American Airlines also praised the mayor and the new plan, saying it reflected a proposal to move forward “in a way that protects the competitiveness of O’Hare.”
“The path ahead will be challenging, and we’ll all need to continue working together to get this project completed within the allotted budget,” American said in a statement. “Keeping our customers, team and the enduring vitality of our Chicago hub at top of mind, we extend our steadfast commitment to working together with all stakeholders to deliver a modern airport that Chicago will be proud of – while keeping the project moving forward and vigilantly monitoring cost to preserve O’Hare’s status as an important connecting hub in our global network.”
The terminal work is the centerpiece of a broad overhaul of the airport, a crucial piece of the city’s economy and a hub in the nation’s air system, that was initially pegged at $8.5 billion when the airlines signed off on the overhaul in 2018. The terminal work was to feature a soaring, 2.2 million-square-foot Global Terminal, designed by a team led by architect Jeanne Gang, which would more than double the space of the current Terminal 2 and add additional gates. It would also allow travelers to move more seamlessly between domestic and international flights.
But costs, largely financed by city bonds backed by airline fees, ballooned, and the project fell significantly behind schedule. The airlines said at one point last year they had received a cost estimate that put the terminal work alone $1.5 billion over budget in 2018 dollars.
The proposal to rephase the order of construction on the Global Terminal and satellite concourses was initially blasted by U.S. Sen. Dick Durbin, who had worried that changing the order would mean the second satellite concourse could be indefinitely delayed or cut. But weeks later he changed course and gave the plan his vote of confidence, saying “we’re in a better place.”
“There’s been an effort to increase the conversation” he said at the time. “I think we have a proposal that will reach our goal of 25% increased capacity.”
Friday, Durbin and U.S. Sen. Tammy Duckworth praised the agreement reached between the airlines and the city. The two satellite concourses are “essential” for growth and modernization at the airport, and the project would expand gate capacity, their offices said.
“After months of volleying counter-offers and facing deadlock, we are relieved that the city of Chicago and the airlines have finally come to an agreement about the future of the Chicago O’Hare International Airport Terminal Project,” they said in a joint statement. “With both parties now in agreement, we can begin to take a major step forward on the project with a shared vision — one that allows O’Hare to not only maintain its world-class status, but to also modernize its terminals while leaving room to expand to meet the demands of travelers well into the future.”
Mayor Brandon Johnson’s office did not answer Tribune questions Friday about the latest project budget, when construction might begin, or whether any other changes had been floated. But in a statement, his office said it was “thrilled” to say the airlines had accepted the city’s proposal, and prioritizing the Global Terminal would “bring benefits to the traveling public sooner, while providing thousands of jobs and contracting opportunities to Chicago.”
“Today’s announcement is a major step forward in the growth of O’Hare – and the Chicago region – as a key hub for travelers from across the globe,” the statement said.
Earlier this week, the LaGrange-based Illinois Economic Policy Institute found completing the O’Hare project as initially planned could generate $18.4 billion in economic activity and create 95,000 jobs by 2033.
After construction is finished, the project, as planned, would also create 1,600 jobs, including 400 directly at the airport, and increase state tax revenue by $39 million and local tax revenue by $24 million, the report found.
But scaling back the scope of the project or delaying it further could affect those figures, IEPI economist Frank Manzo said.
“Scaling back or delaying work would not only potentially harm the region’s economy by reducing those impacts, but it could jeopardize O’hare’s status as the most connected airport in the world,” he said.
If any future changes in the scope of the project or budget overruns arise, the airlines would have to sign off under the terms of their 2018 agreement with the city.
