American Airlines Resolves Gate Dispute with Chicago O’Hare

At the end of February, American Airlines had made it clear that it was not prepared to sign a new lease as current plans stood for the US$8.5 billion revamp of O’Hare Airport.

American’s 35-year lease at O’Hare ends in May. The principal cause of the discontent was the supposed “secret” allocation of five of the eight new proposed gates in Terminal 2 to rival airline, United Airlines, leaving three for common use. Both carriers have major hubs at O’Hare.

American Airlines offers 520 peak-time summer departures, and United has 620 to 650. United currently has 14 more gates than American, and each gate can handle eight to ten departures per day. That gate disparity will close to nine when American adds five more gates it’s paying for in O’Hare’s Terminal 3 this spring, but the additional gate allocation the city has said it is giving United as part of the O’Hare expansion deal would widen the gate gap again to a 14-gate disparity.

One proposed solution was to accelerate the construction of three American gates that are already included in Phase 1 of the redevelopment plan, thereby leveling the playing field and keeping the competitive balance at O’Hare. This was seen by American to only be a temporary fix. American then sought to re-level the playing field by urging the city to accelerate the construction of three additional gates, and award those to American, but this was initially rejected without explanation.

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To resolve the dispute, American will now see three additional gates to be fast tracked in phase 1 of the development. As gates are the most valuable asset for an airline at an airport, it would be difficult for American Airlines to compete against United Airlines and to grow as an airline.

Source: avitrader.com

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