Airline merger may bring new talks on new O'Hare terminal

Chicago's warm welcome to the United-Continental Airlines merger could include more flexibility on the thorny issue of building a western terminal as part of O'Hare International Airport expansion.

Gov. Pat Quinn and Mayor Richard M. Daley along with business leaders hailed the airlines' partnership at a news conference Tuesday, saying it would spark an economic boom.

Airline executives, who announced the proposed merger Monday, wouldn't address friction between the city and United over how to fund the final phase of O'Hare modernization, which includes three new or extended runways and a western terminal.

United executives will not "comment publicly on paying whatever it takes for anything," United CEO Glenn Tilton said. O'Hare's main carriers, United and American Airlines, have questioned the need for a new terminal and balked at increases in rents and landing fees set by Chicago to pay for construction loans.

The city has long insisted that the western terminal and three runways - part of a six parallel runway expansion aimed at reducing congestion - are crucial components of the project, which they aim to complete by 2014. DuPage County leaders contend western access into O'Hare is paramount to future economic prosperity and a primary reason they now support modernization.

"Modernization is key," Daley said, adding any delays would affect the "future of the airline industry."

But he also commented that "everything was on the table," in negotiations with the airlines and the western terminal wasn't an essential part of the plan. Later the mayor clarified that "everything was essential. An airport can't live in the past."

However, Chicago Department of Aviation Commissioner Rosie S. Andolino noted the need for new gates that a western terminal would provide isn't as pressing now with the economic slump as it was before.

"It's a demand-driven process," she said, adding that gates will be needed as the industry recovers.

Asked if that meant the runways could conceivably be built by 2014 without the western terminal, Andolino noted that "anything's possible."

For DuPage County officials, opening up the western side of the airport is a necessary part of the economic development they expect to come to the area in tandem with the extension of the Elgin-O'Hare Expressway east into the airport.

Whether it's parking to begin with and a terminal later, Bensenville Village President Frank Soto said western access is tied to county plans for industrial and commercial growth in the corridor.

"Western access is extremely important, not just for Bensenville but the entire region," he said.

Asked about the issue, Continental CEO Jeff Smisek said, "to be candid I haven't paid a lot of attention. It wasn't important to me until today."

The United-Continental merger creates the world's largest airline, to be headquartered in Chicago. It still requires approval by shareholders and federal regulators.

While some analysts have cautioned creating a mega-airline will give the new company carte blanche to raise fares, Smisek, who will lead the combined organization, said that won't happen.

"It's a merger of a complex network," he said. "It's not built on capacity reductions or airfare increases."

Smisek added that United and Continental's international routes don't overlap and there's minimal redundancy with domestic flights.

Quinn called transportation "the key to economic growth," and he also made a plug for the O'Hare project, saying "the modernization of O'Hare field will make it second to none."

The blessing of American and United is necessary for the city to proceed with bonds for airport construction that would be paid with fees on passenger fares.