American Airlines is pissed that Chicago O’Hare expansion plans preserve United’s 14 gate advantage rather than the 9 gate advantage they say they expected after shelling out for 5 new gates themselves.
At issue is O’Hare’s $8.5 billion expansion plan, and what they dub a ‘secret provision’ added in ‘at the last minute’ that gives United more gates than they thought the plan entailed.
American Airlines at Chicago O’Hare
Both United and American have resisted adding gates at Chicago O’Hare for years, since they have most of the gates themselves and don’t want competition. They are happy to see gates added as long as they are the ones who get the gates, and if they’re both getting gates they want to ensure neither gets an advantage over the other.
United Airlines at O’Hare
Things are getting nasty and American Airlines emailed their Chicago-based employees about the dispute:
I’d quibble with a couple of things in this email.
- Chicago isn’t “the nation’s only dual carrier hub” since Alaska and Delta both hub in Seattle and Virgin America and United both hub in San Francisco. Of course there are three-carrier hubs as American well knows from its experience at New York JFK and LAX.
- American says they were assured the gate gap between American and United won’t widen, and that’s true relative to the status quo — so the issue here is the baseline (widen compared to today, or widen compared to the agreement for American to build more gates?).
Tortas Frontera, the One Thing We Should All Agree on at O’Hare
This week the airline told the federal government that if they don’t get their joint venture with Qantas approved they’d drop Sydney service. Now they say they won’t sign a new lease at O’Hare as-written. I don’t expect them to drop Chicago service, too…
Instead this will ultimately be settled by the lobbyists (and possibly courts), because gates are allocated by politicians and their designees. And once allocated, airlines are generally permitted to lock in their use of the gates into the future keeping out potential competitors. Alaska Airlines bought Virgin America largely for access to the gates that Virgin had accumulated at congested airports that they couldn’t replicate themselves.
As American notes, competition is good. In the past in Chicago they’ve been against adding competition, so I’m happy to welcome them to the cause.