American and United drop lawsuit against O’Hare expansion

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American and United have agreed to drop a lawsuit against the city of Chicago to prevent completion of a portion of the O'Hare International airport expansion project.

The carriers, the city of Chicago, the airport and the US Department of Transportation have unveiled a $1.17 billion agreement to support the second phase of O'Hare's modernization, including a new south runway at the airport.

Of the $1.17 billion, $298 million is comprised of general airport revenue bonds from the airlines, $365 million is being supplied through passenger facility charge revenues and $280 million from new grant commitments from the FAA. The city of Chicago is also providing funding.

A spokesman for the US Department of Transportation (DOT) explains that a previous letter of intent from FAA for $410 million in support of O'Hare modernization still needs to be firmed, and another letter of intent for $155 million has also been signed.

The airlines and city of Chicago have agreed to restart negotiations no later than 1 March 2013 over terms for the remaining $2.23 billion left to fund the completion of O'Hare modernization.

Once all the phases of the programme are complete, the airport will feature eight runways, a runway extension and a new air traffic control tower.

After American and United filed their lawsuit in January, US Illinois Senators Dick Durbin and Mark Kirk worked with the DOT, the carriers and the city to try and hammer out an agreement outside of the courts.

"There were many who were skeptical that a deal could be reached, but fortunately Mayor Daley was not one of them," says Durbin. "I commend him and the CEO's of both airlines for their commitment to working hard to resolve their differences outside the courtroom. I also want to thank Secretary LaHood for engaging and bringing everyone together to reach today's deal - which is good news for the city of Chicago."