As my colleague John Pletz reported in Crain's this week, Chicago is moving ahead with an $8.5 billion project that will expand and modernize terminals at O'Hare. Unlike San Francisco, Dallas-Fort Worth, Orlando and Austin, the city isn't allowing COVID-19's devastating short-term impact on air travel sideline this critical infrastructure investment.
A decision to delay or cut back O'Hare expansion would be a big bet against long-term growth and a vote of no confidence in Chicago's economic future. More than any other single asset, O'Hare has powered Chicago's rise as an international commerce hub, lifting it above cities that can't match our worldwide air travel connections. Those connections will keep bringing companies and jobs to Chicago, provided we keep investing in O'Hare.
With airport projects across the country on hold, Chicago has a rare opportunity to gain ground on rivals that have encroached on O'Hare in recent years. Moving forward with expansion while air travel is down positions O'Hare to leap ahead when it rebounds, as history tells us it inevitably will.
The current slowdown, dramatic as it may be, doesn't change the case for expanding O'Hare terminals. Recent runway improvements and expansions gave O'Hare badly needed tarmac space. But bottlenecks persist, thanks to shortages of gate capacity, cramped concourses and a convoluted layout that puts international travelers bound for connecting flights on a forced march between terminals to reach connecting domestic flights.
And as O'Hare aged, other airports invested in the capabilities and amenities international travelers have come to expect. O'Hare trails five other U.S. airports in international traffic.
The terminal expansion would vault O'Hare over competing airports, opening the door to growth and vastly improving the airport experience. Dozens of new gates would reduce delays, give passengers more flight options and spur airline price competition by allowing more carriers to serve the airport. Adding 3 million square feet of terminal space would ease crowding, while a new "global alliance hub" enables international code-sharing partners to use the same terminal.
With an eye-catching design by Chicago architect Jeanne Gang and cutting-edge technologies on par with next-generation airports popping up around the world, the new terminal would bring O'Hare up to 21st-century standards. A world-class airport, in turn, will cement Chicago's status as a world-class city.
That will be just as important in the future as it has been in the recent past. Globalization may have hit obstacles, but it's not going to stop. No virus can repeal the economic logic behind an increasingly interconnected world. A vaccine will come, and people will start traveling in search of opportunities again. And businesses will always migrate to cities with the most global connections, which has been a key advantage for Chicago in the competition for jobs.
Large-scale projects like the terminal expansion inevitably span economic cycles. Unwavering commitment is essential to maintaining momentum through downturns. City officials clearly intend to move ahead, and airline executives also appear to be on board, at least for the time being.
Airlines' commitment matters because their landing fees provide a big chunk of airport infrastructure funding. It's easier for carriers to support expansion now, before it starts costing them big money. The project is still in the design phase, with costly construction work a few years off.
Airlines have stalled expansion projects before, famously suing Chicago in 2011 in an unsuccessful attempt to block completion of the new runways. Fortunately, a revised lease agreement signed by Chicago and the airlines in 2018 limited the absolute veto power they once held over new infrastructure spending. Airlines also signed off on $6.1 billion in expansion work at the time.
And so far, O'Hare officials haven't encountered any impediments to the terminal project. The city has raised $1.8 billion through a bond offering to finance initial work on Terminal 5. Another important milestone came last month when railroads finally assented to construction of a highway bridge over tracks west of O'Hare, setting the stage for long-sought western access to the airport.
Of course, timetables for completing various phases of the project may need to be adjusted over time based on air traffic trends. But O'Hare expansion must keep moving fast enough to capitalize on competitors' retreat.