American and United Sign New $8.5 Billion Plan to Revamp Chicago O’Hare Airport

CHICAGO- United (UA) and American Airlines (AA) expressed their support for the plan proposed by the Chicago city earlier in April to alter the construction sequence for a new Global Terminal and two adjacent satellite concourses at O’Hare Airport (ORD).

Initially, the plan prioritized the construction of the two satellite concourses, which would have provided additional gate space for airlines. At the same time, Terminal 2, which was aging, underwent reconstruction into a new Global Terminal. However, the city’s April proposal suggested advancing the construction of the Global Terminal.

Photo: Foster Epstein Moreno

American United Signs Chicago Revamp

According to United, under the revised plan, the city’s aviation department can proceed with constructing the first satellite concourse while concurrently planning a phased construction of the Global Terminal.

Should sufficient funds remain available, the aviation department would construct the second satellite concourse and the tunnel linking the two concourses.

Both airlines, responsible for significant construction expenses, advocated for this change in the construction sequence to safeguard the new terminal from potential budget overruns. Their endorsement paves the way for progress on a crucial aspect of the airport reconstruction project, which has faced delays and contentious negotiations due to rising construction costs.

“We are pleased that Mayor Johnson and his aviation department have proposed a phased plan that prioritizes the utilization of project funds for the essential components of the program—namely, the O’Hare Global Terminal and Satellite 1,” stated United in a release.

American Airlines also commended the mayor and the newly proposed plan, emphasizing its alignment with advancing O’Hare’s competitiveness.

“The road ahead will pose challenges, requiring continued collaborative efforts to ensure the successful completion of this project within the allocated budget,” stated American in a release.

The terminal redevelopment serves as the focal point of a comprehensive transformation of the airport—a critical component of Chicago’s economy and a key node in the national air transportation system.

Photo: SOM

$8.5 Billion Overhaul Plan

Originally estimated at $8.5 billion when the airlines endorsed the overhaul in 2018, the terminal project was envisioned to feature a grand, 2.2 million-square-foot Global Terminal, conceived by a design team led by architect Jeanne Gang, reported Chicago Tribune.

This terminal would significantly expand upon the current Terminal 2, providing additional gates and facilitating smoother transitions for travelers between domestic and international flights.

However, costs, predominantly financed through city bonds supported by airline fees, escalated, and the project fell significantly behind schedule.

At one juncture last year, the airlines received a cost estimate indicating that the terminal work alone would exceed the budget by $1.5 billion in 2018.

Initially, the proposal to resequence the construction order of the Global Terminal and satellite concourses faced staunch criticism from U.S. Sen. Dick Durbin. He expressed concerns that altering the order could lead to potential indefinite delays or cuts to the second satellite concourse. However, he reversed his stance after some time and endorsed the plan, stating that “we’re in a better place.”

“There’s been an effort to increase the conversation,” he remarked at the time. “I think we have a proposal to reach our 25% increased capacity goal.”

Photo: Santiago Calatrava

On Friday, Durbin and U.S. Sen. Tammy Duckworth lauded the agreement between the airlines and the city. They asserted that the two satellite concourses are “essential” for the airport’s growth and modernization, emphasizing that the project would bolster gate capacity.

“After months of back-and-forth negotiations and facing stalemates, we are relieved that the city of Chicago and the airlines have ultimately reached an agreement regarding the future of the Chicago O’Hare International Airport Terminal Project,” they stated jointly.

Photo: Fentress-EXP-brook-Garza

Thousands of New Jobs

Earlier this week, based in LaGrange, the Illinois Economic Policy Institute released findings indicating that completing the O’Hare project as initially outlined could yield $18.4 billion in economic activity and foster the creation of 95,000 jobs by 2033.

Upon completion of construction, the project, as designed, is projected to generate 1,600 jobs, with 400 of them directly at the airport. According to the report, it is forecasted to enhance state tax revenue by $39 million and local tax revenue by $24 million.

However, Frank Manzo, an economist at IEPI, cautioned that altering the project’s scope or further delaying it could impact these projections.

“Scaling back or delaying the project could not only potentially diminish the economic benefits to the region but also put O’Hare’s status as the most connected airport in the world at risk,” he warned.

Under the terms of their 2018 agreement with the city, the airlines would need to approve any future changes in the project’s scope or budget overruns.

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