Airlines Say City Needs To Reign In Costs, Not Ask For More Money

After receiving a polite but firm 'no' from the airlines, the city of Chicago will seek federal approval to use $270 million in ticket taxes collected from passengers to cover the soaring costs of its expansion of O'Hare International Airport.

The Associated Press reports Chicago had asked the airlines for more help to cover the costs of reconfiguring runways, and construction of a new terminal facility. The airlines have already funded Phase One of the project, to the tune of $1.87 billion... and they say Chicago needs to bring costs of the $15 billion expansion under control, instead of asking for more money.

"Until we and the city have thoroughly explored all ways to bring the project within budget, we think it is premature to issue more general airport revenue bonds to fund cost overruns," said American Airlines spokeswoman Mary Frances Fagan. "We want Phase One built on-budget."

The expansion is already $400 million over estimated costs, according to the AP.

So, hat in hand, Chicago has gone to the government for help.

"The airlines said ‘no’ for new money right now, and that’s OK with us," project director project director Rosemarie Andolino said. "We have a problem to solve and we are solving it in a way that bypasses the need for new (revenue bonds). The airlines still support the modernization program."

Although it's up to the airport to collect the passenger fees, authorities at O'Hare need federal approval before they can dip into that fund. That will happen after a public comment period on Chicago's plan expires February 2.

Critics of the expansion effort at O'Hare says this latest issue shows the airlines have finally become aware of cost overruns... and they're not going to stand for it.

"The costs are spiraling out of control and the airlines say they won’t pay for it anymore," said Elk Grove Village Mayor Craig Johnson.

FMI: www.ohare.com