Chicago’s O’Hare airport isn’t the most modern or beautiful airport. But the biggest problems they face are weather, distance from the city, and insufficient gates to grow. They’re planning to do something about gates while in the process rebuilding terminals.
I’m ultimately happy with O’Hare today since so far it’s the only place with a United Polaris lounge, American’s second Flagship lounge just opened there, and they’ve got Tortas Frontera.
Don’t expect big new competition to come from an enlarged airport, existing players should benefit although Delta should get a larger footprint out of the changes.
The 10 Year Vision to Recreate O’Hare
Of course a 10 year plan — dubbed O’Hare 21 by Mayor Rahm Emanuel — is going to take much longer than 10 years. But here’s what they’re envisioning:
- Terminal 2 (Delta, Air Canada, United Express) becomes a new international terminal
- Terminal 1 (United) expands
- 30 new gates in total including the 5 on terminal 3’s L concourse that’s already been announced for American and 9 more in the current international terminal 5.
- Delta, JetBlue, and Spirit should get more gates out of this. Terminal 1 becomes Star Alliance,
terminal 3 oneworld, and terminal 5 SkyTeam.
Under the plan, the city would tear down Terminal 2 in sections to avoid disrupting operations like at New York’s LaGuardia Airport, which is a mess. The new “Global Terminal,” as Evans said she’d like to rechristen Terminal 2, provide international passengers flying on United, American and their foreign partner airlines easy access to domestic flights. In other words, no longer would most connecting travelers have to maneuver with their baggage from Terminal 5 to Terminals 1, 2 or 3. Other new gates would be provided by extending United’s current remote Concourse C in Terminal 1, requiring the construction of new tunnels.
Doing all of that would free up space in Terminal 5, which could be converted at least in part to domestic service, allowing more space for Delta, JetBlue, Spirit and Delta, all of which reportedly are interested in adding gate space here.
The plan is near-final, pending federal government and city council approval, and the airport authority expects to determine who gets which gates by year-end.
Somehow the airport authority thinks the slow growth in new international flights out of the airport is because of ugly terminals.
United’s C Concourse at O’Hare
Don’t Expect Expansion to Mean More Competition
One reason we don’t have more airline competition is that we don’t have airport competition. The Chicago Department of Aviation manages both O’Hare and Midway airports. Aviation Commissioner Ginger Evans says the new plan for O’Hare was “produced by the airlines” which means the incumbent airlines.
Remember that a major reason that Alaska Airlines is buying Virgin America is access to congested airports. Alaska didn’t think they could duplicate the gates and slots that Virgin has on their own.
American Airlines at Chicago O’Hare
When you look at New York airports renovations are being funded through public-private partnerships. Delta is putting up billions of dollars, but that gives them special rights. By the way they’re going to get their money back. The government trades a future revenue stream from the terminal so that Delta puts up the cash. And that’s why we get “high end retail” in airport renovations, it’s not because passengers are clamoring for more airport shopping rather those stores generate more revenue which means more going to the residual claimants (like Delta).
The Chicago Department of Aviation expects their plan to be approved by the Trump administration’s FAA because the administration is ‘business friendly’ and they believe their plan is friendly towards their existing airline businesses.