Air- $1.1B Midway improvements promised under new ‘use agreement’ – Chicago Sun-Times

Posted: September 13, 2012 in Uncategorized

September 12, 2012

Airlines operating out of Midway Airport would make a minimum of $1.1 billion in capital improvements over the next 15 years — with the prospect of sharing $22.5 million in airport revenues — under terms of a new “use agreement” proposed by Mayor Rahm Emanuel at Wednesday’s City Council meeting.

Five years ago, Southwest Airlines demanded a share of profits generated by then-Mayor Richard M. Daley’s plan to privatize Midway Airport before signing off on the $2.5 billion deal, which subsequently fell through for lack of financing.

The airline also questioned whether a private operator could turn a profit — and lower airline rents and landing fees — without cutting back on maintenance and emergency services.

Southwest ultimately dropped its reservations after the city agreed to freeze “total airline fees” for the first six years and increase them by the rate of inflation after that.

The new agreement commits airlines servicing Midway to bankroll a minimum of $1.1 billion in capital improvements over the next 15 years, ensuring that the Southwest Side airport would “continue to grow and remain competitive.”

Emanuel has promised to make a decision on whether to revive the 99-year, $2.5 billion Midway privatization deal by Dec. 31 after asking the Federal Aviation Administration for a series of extensions.

http://www.suntimes.com/business/15109024-420/11b-midway-improvements-promised-under-new-use-agreement.html

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