O'Hare International Airport's ambitious $8.5 billion revamp is stuck in a holding pattern, and costs are spiraling out of control. The much-needed overhaul, which was intended to reposition the airport as a cutting-edge global hub, has stuttered under the weight of budget overruns that are threatening Chicago's economic vitality and its status as an essential air nexus. Bloomberg reports that the project's centerpiece – a new Global Terminal and two satellite concourses, is $2 billion over budget due to the increasing expenses of labor and materials post-pandemic.
Chicago's administration, under the guidance of Mayor Brandon Johnson, who's been in office less than a year, is embroiled in cost-cutting discussions with major airlines United and American. The carriers, which account for the majority of traffic at O'Hare and are responsible for footing a significant part of the bill, are seeing red as costs continue to climb. According to Bloomberg, Chicago's government has floated ideas involving the use of cheaper building materials, redesigns, and vows to continue working with the airlines to find a viable path forward.
The logjam comes as surrounding megahubs like LaGuardia in New York have wrapped up their makeovers and are setting new standards for global travel. "If Chicago doesn’t proceed with the investment, then the concern is they just won’t have the facilities and they’ll just stagnate," Fitch Ratings' Seth Lehman told Bloomberg. The city's official website states they presented an updated "on-budget plan" to the airlines, asserting that the savings were found by eliminating parts of the project that were not required by the original 2018 agreement.
However, any semblance of harmony seems to be flying at a different altitude. United and American are skeptical of the city's budget trim proposals, calling them out for having a "lack credibility" in a letter seen by Bloomberg. The airlines stressed that the city's savings strategies have not been fleshed out with concrete bids or pricing, and what’s more, it leaves "zero margin for error." As negotiations continue, concerns linger about ensuring the project doesn't affect passengers' experiences, especially the importance of synchronizing the new concourses with existing terminals without resorting to clumsy stopgaps like busing.
Meanwhile, the Chicago Tribune has detailed the ongoing saga, noting the O'Hare overhaul has been hampered by a mire of financial and logistical hiccups. Despite progress, such as securing federal environmental approval and initiating a terminal renovation that allowed Delta to shift operations, the pivotal construction of the Global Terminal and the satellite concourses is yet to take flight. The paper even highlighted criticism from U.S. Sen. Dick Durbin over the city's proposal to alter the original construction sequence. Durbin, heavily invested in the project's success, commented in a Chicago Tribune interview that “It cannot be overstated that both Chicago and the Midwest’s economic success and connectivity are at stake."
The overhaul is not just about the buildings; it's about maintaining O'Hare's position as a prominent aviation player, one that can stand shoulder-to-shoulder with low-cost alternatives and continue to spin the economic gears of the region. The Chicagoland Chamber of Commerce warned through its president, Jack Lavin, that unsustainable project costs could hike ticket prices or prompt airlines to divert flights to other cities. According to the Chicago Tribune, he plainly stated, "The impact on O’Hare, and subsequently Chicagoland, could be devastating." Amidst this turbulence, Chicagoans are waiting eagerly for news of clear skies and smooth landings for the beleaguered project.
