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.
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