City of Chicago Proceeds With $20 Billion Airport Expansion Plan

Some question the expansion in the wake of a troubled market.


CHICAGO -- Both United Airlines and American Airlines posted fourth quarter losses, and United also announced yesterday the elimination of another 1,000 jobs, bringing the total number of United employees out of work to 2,500 salaried and management staff.

Meanwhile, the City of Chicago is moving forward with a $20 billion plan to expand O'Hare airport. The city expects the airlines and taxpayers to pay for the massive project. The brunt of the cost will fall to United and American, calling into question both the viability and timing of the proposed expansion.

"... (the) floor has fallen out of air travel," says Harlan Platt, a finance professor and airline expert at Northeastern University College of Business Administration.

On top of the airlines' financial troubles, O'Hare gates leased to United Airlines and American Airlines are not being utilized due to staffing and competitive issues, and reports indicate that airlines are trimming their schedules by nearly 15 percent. In addition, the Federal Aviation Administration (FAA) reported that air traffic at O'Hare Airport is down to its lowest level in 15 years.

Joe Karaganis, a lawyer who represents opponents of O'Hare expansion, says the significant reductions in air travel demonstrates that the airlines cannot afford the $20 billion expansion project.

"We're in a recession. Anyone who has followed this project knows it won't alleviate the flight delay situation at O'Hare Airport," says John Geils, president of the Village of Bensenville. "This is neither the time nor the way to move forward with a lackluster plan that will sink our economy and airlines further into debt."

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