February 28, 2018 / 5:20 PM / a year ago

Gate dispute clouds expansion plan for Chicago's O'Hare Airport

CHICAGO, Feb 28 (Reuters) - A new $8.5 billion plan to expand Chicago’s O’Hare International Airport ran into turbulence on Wednesday due to a gate dispute involving the airport’s two major carriers.

American Airlines Group Inc said it cannot sign a new lease needed for the project, citing a “secret provision, inserted at the last minute” that gives additional gates to United Airlines Inc.

“The United gate deal would undermine competition, allowing the largest airline at O’Hare to expand its size advantage for years into the future,” American said in a statement. “Thus, the United gate deal creates a clear winner, United, and clear losers: namely, competition, Chicago travelers and American Airlines.”

American added that it was prepared to compromise and would sign the lease if the provision were dropped.

There was no immediate comment from Mayor Rahm Emanuel’s office or from United.

O’Hare is the world’s second-busiest airport in terms of take-offs and landings after Atlanta’s Hartsfield–Jackson International Airport, according to an Airports Council International 2016 ranking.

In a statement issued by the mayor on Wednesday morning, Oscar Munoz, United’s chief executive officer, hailed “the improvements in our new agreement,” saying they will help the airline provide a “superior travel experience” for its customers. United Airlines is owned by United Continental Holdings Inc.

The mayor’s official announcement of the plan came ahead of a city council meeting on Wednesday where he was scheduled to introduce the project and seek up to $4 billion of airport revenue bonds to start financing it.

The eight-year plan calls for replacing one of O’Hare’s existing terminals with a new global terminal, where United and American would be relocated. Other terminals would be renovated to expand gate capacity. Construction is scheduled to begin next year.

The expansion relies on a new use and lease agreement with airlines to replace an existing 35-year deal that expires in May. Chicago has already spent billions of dollars to reconfigure and extend runways at the airport. (Reporting by Karen Pierog in Chicago Editing by Matthew Lewis)

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