American Airlines announced its opposition to an $8.5 billion overhaul of O'Hare International Airport on Wednesday, alleging that the proposal contains a "secret provision, inserted at the last minute" that would give additional gates to United Airlines.
American said in a statement that after 18 months of negotiations, the airline "cannot sign the lease in its current form," saying that as is, the deal undermines competition and "creates a clear winner."
United responded forcefully to American, calling their statements "disingenuous."
"This was not a secret deal reached at the last minute," the company said. "American has been aware of our agreement for over a year and has worked to block the implementation at every opportunity. As Chicago's hometown airline, we are fully committed and excited about the opportunity to grow here in Chicago and make O'Hare a world-class airport."
Chicago Mayor Rahm Emanuel introduced the proposal at City Council Wednesday, detailing a plan for the airport's first major capital improvement in more than 25 years, and its largest ever.
Terminal 2, which is 55 years old, would be torn down to make way for the new "O’Hare Global Terminal" that would streamline customs and immigration processing, Emanuel said in a statement. It would also allow for wider concourses and gates to accommodate larger planes on international flights.
Terminals 1 and 3 would also undergo renovations, officials said, with an upgrade and expansion planned for Terminal 5. In total, the proposal would increase gate capacity by 25 percent and increase terminal square footage from 5.5 to 8.9 million square feet, according to the City.
The plan also includes improvements to security screening in an effort to reduce wait times, three new baggage systems as well as new self-service technologies to make the check-in process faster and easier, Emanuel said.
The deal comes as the airlines near the end of a 35-year lease in May. Emanuel is seeking to leverage that expiration to obtain higher fees from carriers that would in turn finance the project, paying for the construction without using tax dollars.
In all, the expansion is projected to take 8 years and would create 60,000 construction jobs, the City said.
Though United was among the airlines whose support was included in Emanuel's statement announcing the proposal - alongside the backing of Delta, Spirit and Alaska - it was unclear the impact American's opposition may have on the deal.
"We would sign the lease if it did not include this provision," the statement from American continued. "Alternatively, we are prepared to compromise. Indeed, since learning of the United gate deal less than two weeks ago, American has sought to re-level the playing field by urging the City to accelerate the construction of three additional gates, and award those to American."
"To date, the City has dismissed that approach without explanation. We encourage city leaders to fix the lease and ensure competition remains vibrant at O’Hare," the statement ended.