United Airlines and American Airlines have approved the City of Chicago’s revised offer to continue with an $8.5bn project to upgrade Chicago O’Hare Airport.
This agreement followed “months of volleying counter-offers and facing deadlock” over spiralling costs of the project, but, with an action plan to keep costs in check, the airlines have agreed to press ahead.
Addressing the agreement, US Senator Tammy Duckworth, who sits on the US Senate Committee on Commerce, Science and Transportation and is chair of the Subcommittee on Aviation Safety, Operations and Innovation, said: “With both parties now in agreement, we can begin to take a major step forward on the project with a shared vision – one that allows O’Hare to not only maintain its world-class status but to also modernise its terminals while leaving room to expand to meet the demands of travellers well into the future.”
Why the revamp?
From 1963 to 1998, O’Hare was the world’s busiest airport for passenger traffic. Currently, it is the ninth busiest in the world and the seventh largest in the US by area, spanning 30km2.
“O’Hare plays a central role in US air traffic, serving as a hub for United and American Airlines,” explained Nicholas Wyatt, head of research and analysis of travel and tourism at GlobalData.
“However, it risks losing ground to the likes of JFK and Dallas-Fort Worth as those airports continue to push on with transformative projects aimed at helping them compete with some of the world’s top airports.”
The overarching project, called O’Hare 21, was first unveiled in 2018. The overall aim of the project is to expand the gate capacity of the airport to offer a “global alliance hub”, integrating domestic and international terminal operations. The project encompasses a new Global Terminal, the expansion and modernisation of Terminal 5, and the construction of two new satellite concourses to expand gate availability.
In 2023, the costs of the project spiralled to the extent that both American Airlines and United Airlines called for the Global Terminal project to be cancelled or scaled back.
The new agreement rearranged the order of construction, with work on the Global Terminal being accelerated while the construction of the two satellite concourses will be delayed.
A statement from United Airlines explained: “We are pleased that Mayor Johnson and his aviation department have put forth a phasing plan that will ensure that TAP funds are first spent on the mission-critical portions of the program — the O’Hare Global Terminal and Satellite 1.”
“The Global Terminal has always been the centrepiece of this programme and the crucial piece needed to ensure Chicago maintains its status as a global hub. Under this new phasing plan, we can deliver the most impactful elements of the modernisation project the quickest."
The airlines, which are the airport’s largest carriers, will contribute funds from airline fees via an agreement with the city council to ensure the project stays on budget.
How is O’Hare being upgraded?
O’Hare 21 is described as: “Chicago’s vision for a modern airport that will be an efficient and accessible international gateway, bringing the world to Chicago, and Chicago to the world.”
As a “multi-dimensional, multi-phased umbrella for the long-term visions for O’Hare”.
Gates and concourses will be reconstructed, expanding the capacity to a total of 235 gates and expanding ramp space to accommodate bigger aircraft.
The Global Terminal, costing $2.2bn alone, will double the size of the existing Terminal 2, hosting international and domestic arrival gates and state-of-the-art baggage systems alongside new immigration and customs facilities.
Impact and necessity
Wyatt explained that this is part of a trend toward airport mega projects with ongoing projects at JFK, Dallas-Fort, Istanbul and the recently announced $35bn Al Maktoum International Airport in Dubai.
“The authorities in those cities have realized the sizeable economic benefits of a major airport and the risk for Chicago is that a lack of investment could hold the city back from reaching its full economic potential in the coming years,” he said.
Commenting on its commitment to the project, American Airlines said it would be working to keep the project moving forward and “vigilantly monitoring cost to preserve O’Hare’s status as an important connecting hub in our global network”.
