(subscribers only) of Aviation Daily
includes a story about how United and American have agreed to delay their litigation schedule against the City of Chicago over funding for the $8 billion O'Hare Modernization Program (OMP)
by five business days at the request of the Dept. of Transportation. DOT wants to give both sides more time to "explore alternatives to the litigation.”
OMP was unveiled by Mayor Richard M. Dailey in 2001 and approved by FAA in 2005. Phase One of the program has been delayed by lawsuits filed by residents of the communities of Bensenville and Elk Grove Village, whose towns were torn down to accommodate the airport's expansion. The city was also sued by families whose relatives are buried at St. Johannes Cemetery, an historic site that occupies the center of Runway 10C-28C.
An abandonded house in the village of Bensenville, Ill.
Under Phase One, two runways and the extension of an existing runway were to be completed. The completion of the north runway, 27R/9L, in November 2008, and the extension of another runway created a three-parallel-runway configuration that has eased delays at O'Hare.
Airlines say they secured the $2.5-billion portion of the $3.2-billion, first-phase cost and that the second-phase construction is not needed, for now. They argue that average delays are down 60% from 2004 levels and that operations have fallen 5% from the time that the $3.2-billion modernization program Phase One was started. A runway near completion at O'Hare circa July 2008
All photos by Benet J. Wilson
The airlines want the same type of timetable for Phase Two that existed for Phase One, which consisted of a series of triggers that alerted the city and airlines that it was financially responsible to move ahead on key components of the project. The city says it is within its legal rights to proceed as it has.
The airlines argue that they secured the $2.5-billion portion of the $3.2-billion, first-phase cost and that the second-phase construction is not needed, for now, noting that average delays are down 60% from 2004 levels and that operations have fallen 5% from the time that the $3.2-billion modernization program Phase One was started. They are balking at signing for the $3.36 billion second phase of OMP.
Phase Two projects include two new runways, one runway extension, taxiways and other supporting airfield infrastructure. The city has deferred another component of the original plan, a new western access to O’Hare, which would include a new terminal and a connection to other terminals.
Back in October 2006, the city asked the airlines to approve $500 million in capital funding, split between land acquisition for OMP and future projects, and it was turned down. Instead, the city filed for a Passenger Facility Charge (PFC). That PFC has raised $270 million, leaving $130 million unfunded.
In April 2010, the city announced it was selling airport revenue bonds with an estimated value of $1.3 billion to raise new money for capital improvements at O’Hare under OMP. The city has completed the $3.28 billion first phase of the OMP.
The bonds include $1.1 billion of new money and refunding Third Lien General Airport Revenue Bonds, plus as much as $279 million in new money and refunding passenger facility charge revenue bonds, Series 2010. Proceeds will be used for modernization projects, capital improvements and to refinance outstanding debt.
A hearing on the airlines’ request for a preliminary injunction is scheduled March 1-2 in Cook County Circuit Court, according to a joint statement from American and United.