Ball rolling for privatizing Midway

Southwest Airlines has reached an agreement in principle on terms that would allow a private operator to lease Midway Airport in what the city's chief financial officer described Thursday as "a very big first step" toward privatizing the Southwest Side...


Southwest Airlines has reached an agreement in principle on terms that would allow a private operator to lease Midway Airport in what the city's chief financial officer described Thursday as "a very big first step" toward privatizing the Southwest Side field.

But the accord is preliminary, and Southwest vice president Bob Montgomery issued a carefully worded statement that stopped short of a final endorsement.

"With the city, Southwest welcomes the opportunity to increase our collective knowledge about airport privatization in a manner that hopefully produces a mutually beneficial outcome," Montgomery said. "We applaud the City of Chicago for carefully exploring the possibility of a potential long-term lease of Midway Airport to a private airport operator."

The Daley administration now must convince four more of the seven scheduled airlines that operate at the airport to sign on before being able to proceed with the initiative.

If the airlines agree, the city would seek bidders for a long-term lease whose terms also must be approved by the Federal Aviation Administration, the Transportation Security Administration and the City Council.

Mayor Richard Daley, who authorized research on a Midway deal, hopes that a long-term lease could bring a big payday for the city. City Hall's 99-year lease of the Chicago Skyway to a Spanish-Australian consortium in 2005 produced $1.8 billion.

Paul Volpe, the city's chief financial officer, said a deal could not proceed without the assent of Southwest, which accountsing for 70 percent of the airport's activity.

"I am hopeful the other carriers will see the value like Southwest has," Volpe said. "They will enjoy lower rates and charges than they otherwise would."

The airlines would get 25-year leases, with landing fees, rents and other charges frozen for the first six years. For the remainder of the agreements, the charges could rise no more than the rate of inflation.

The carriers also would provide funding only for capital improvements projects which they approve and, along with the city, would have the power to enforce quality standards governing everything from airfield operations to restroom cleanliness.

The airlines would have the right to approve or reject companies that seek to bid on the long-term lease, "subject to reasonableness," Volpe said.

If the required number of airlines sign on, the city will issue a "request for qualifications" from potential bidders. The winner would have to agree to the lease terms negotiated by the city and the carriers.

gwashburn@tribune.com

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