City Hopes For FAA Approval By Year's End

Furthering its reputation for creativity in disposing of its airports, Chicago's Daley regime (er, administration) reports reaching a landmark agreement to privatize Midway Airport.

Crain's Business Weekly reports the $2.52 billion winning bid represents the low end of a range predicted by market observers, but then, this has also turned out to be a bad couple weeks to get big deals financed.

"As the first privatization of a major American airport, this transaction will provide unprecedented benefits for the traveling public, the airlines and the taxpayers of Chicago," Mayor Richard M. Daley said.

Robert Poole -- the director for transportation studies at The Reason Foundation, and a noted proponent of airport privatization -- commented, "That's actually more than I was expecting under current circumstances. It's a bet on the long-term future of Chicago."

The winning bidder is Midway Investment & Development Corp., a consortium consisting of YVR Airport Services Limited., Citi Infrastructure Investors of New York, and John Hancock Life Insurance Company of Boston.

"This contract marks a milestone in the growth of our company and is a clear example of how we can leverage our success at home to develop the best airports in the world," said Larry Berg, president and CEO for the Vancouver Airport Authority. "Since the mid-nineties, our subsidiary, YVRAS, has grown from a great idea into a global airport operator, and we're proud of this homegrown success."

The 99-year lease still needs approval by the City Council, the FAA and the Transportation Security Administration. The city hopes to get FAA approval by year-end.

For Southwest Airlines and Midway’s other carriers, the deal includes a 25-year agreement that caps landing fees below the current level for six years and then allows them to grow at the government's core inflation rate. The city will continue to provide police and fire protection at the airport.

Too bad Daley couldn't have privatized Meigs Field...

FMI: www.ohare.com, www.reason.org