US Senator Dick Durbin (D – IL) has called on American Airlines and United Airlines to move forward on a pricey new terminal at O’Hare International Airport despite the modernization project already being $1.5 billion over budget before it even has begun. Meanwhile, the two carriers have joined forces to question the speed and cost of the project.
Cost Overruns Threaten O’Hare Modernization Projection
Frequent flyers traveling through Chicago O’Hare International Airport (ORD) can attest that the airport needs a refresh, particularly if it wishes to stay competitive as a connecting hub.
Alderman Matt O’Shea, who heads the City Council’s Aviation Committee, laid out the problem to the Chicago Sun-Times:
“O’Hare and Midway need to be modernized. Need to be improved. Parts of both those airports are old and tired. … During the pandemic, were it not for cargo, I don’t know what would have happened at O’Hare Airport. Top airports throughout the country continue to come after us, looking to take passengers. Looking to become stronger hubs. And we need to stay competitive.”
The next phase of construction at O’Hare, which includes a new global terminal designed by Chicago architect Jeanne Gang, has not begun yet. But Chicago officials have announced the phase is already 24% over budget, to the tune of $1.5 billion.
This concerns United and American, which are now jointly questioning the viability of the Terminal Area Program (TAP) funded primarily by taxes levied on the tickets they sell:
“Work on the most expensive TAP elements has yet to begin — we have concerns that costs will escalate further after the work begins.”
Separately, American Airlines expressed concern over the cost:
“We remain committed to working with the Johnson administration to deliver a capital plan that will enhance the customer experience in a prudent and cost-effective manner to keep O’Hare well-positioned for the future and cost competitive for the airline and our customers.”
As did United:
“We continue to work with the city of Chicago and our fellow airlines to advance the terminal redevelopment program in a manner that not only ensures O’Hare’s future financial stability and competitiveness, but also limits costs for the millions of passengers who fly through Chicago’s airport each year.”
Negotiations between the City of Chicago and these carriers are ongoing with city officials reluctant to share details beyond that talks are continuing, though reports have emerged that both American and United want to dramatically scale back the project or scrap it all together.
Meanwhile, Senator Durbin took to Twitter on Friday to insist that the project move on:
United & American Airlines signed a contract which @SenDuckworth & I expect them to honor for the O’Hare Intl Airport Terminal Area Project to move forward. It would modernize & grow terminal capacity to bring in more flights & passengers, a mutual goal of the City & airlines. https://t.co/dj7dSn5GRN
— Senator Dick Durbin (@SenatorDurbin) December 1, 2023
But if the project is already 24% over budget before it even starts, it is hard to blame AA and UA for pushing back.
CONCLUSION
A new central terminal at Chicago O’Hare would be positive for the city, airlines, and passengers. But at what cost? Without an ability to control costs, it is not surprising or unreasonable that both American Airlines and United Airlines are sounding the alarm bells and exploring ways to scale back the ambitious project.
image: Jeanne Gang
No surprise AA/UA are threatening support for a project to benefit Durbin’s state while he continues to champion a terrible credit card reform bill that will obliterate airline finances…
Yet at the same time he wants to strip the airlines of revenue via the Card Competition Act…
$1.5 billion over already? Wow, you would think this is in Illinois! Oh wait…
Thomas Jefferson said it best: ‘The government you elect is the government you deserve.’
Dems always trying to get US taxpayers to fund their economic stupidity.
Illinois is turning into a 3rd world country very rapidly. And to think Chicago was a great city at one time ..
John, have you been to Chicago recently? I was just there over Thanksgiving and I’m in town 2-3 times a year (also grew up there) and it remains one of the world’s great cities.
Also, if I’m reading the report correctly, the taxes proposed to pay for the project are taxes on airline tickets, not more general taxes (e.g., income or property taxes).
@Eric
The motto of government is: ” The money is endless, send as you please, the tax payer will pick up the bill anyway, no matter the boondoggle.”
However, this time the tax will be passed on to the PAX.
Sorry, will avoid ORD at all cost.
It’s easy to spend other people’s money…..
The large concourse with the trees (See photo) is wasted space and is bad for those with knee or hip problems. Too much walking.
How do you have a 24% cost overrun before the project begins? Chicago has turned into a 3rd world country so not sure how the airport improvement would help the city. I agree with Derek about the wasted space especially when you’re running between terminals to get to a connecting flight. Sounds like a total money grab and I hope UAL and AA don’t cave and contribute money because as passengers we will ultimately pay for it. O”hare is a horrible airport which I intentionally avoid and putting lipstick on a pig will not change anything.
Facilities maintenance cost, heating in the winter, utilities… How much carbon footprint are they trying to accomplish there?
Right- but if you’re Senator Turban it doesn’t matter. It’s all about paying off your union constituents at someone else’s expense. To be a hypocrite is to be a Democrat.
The airlines want the new terminal and I don’t blame them for bringing up financial considerations. Ultimately though they want the government to eat any overages. After all, AA and UA took billions from the government in bad faith during Covid so the government set the precedent of getting hosed to benefit the airlines.
Chicago = the new San Francisco. You literally cannot make it up. But keep voting for D’s!
I’ve not yet had the opportunity to visit San Francisco (though my first time will be this coming May) but if it’s anything like Chicago I think I’m in for an enjoyable time. I grew up in Chicago and return there 2-3 times a year and every time it’s hard to leave and I can’t wait for my next return visit!
Advice: Avoid! SF used to be a nice mid-sized city. Great restaurants. But now a feces-filled anarchy.
It’s interesting people are surprised by a cost increase. Have you not looked at inflation since COVID worldwide? It is now much better under control but building materials and labor remain high. $2.2 billion out of $8.5 billion for an entire airport revamp was budgeted to build an entirely new Global Terminal. That number always seemed vastly under budgeted. JFK is spending $19 billion.
Matthew – would you opine the same if it were LAX (a dump),, your home airport??
OGT looks great – I hope they build as planned. Worthy of a world class city.