Daley firm on runway project

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Updated: August 4, 2011 4:20PM

Mayor Daley on Thursday sloughed off two straight bond rating cuts by Wall Street rating agencies concerned about the unprecedented level of borrowing the city is using to keep from grounding Daley’s massive O’Hare Airport expansion project.

Fitch Ratings and Moody’s Investors Service have both raised red flags over Daley’s plan to borrow another $1 billion to keep the project going amid continued opposition from major airlines.

Daley acknowledged that the airlines are refusing to fund the project after initially signing on the dotted line. But, he argued that City Hall has no choice but to forge ahead now that it has the permits needed to build new runways.

“When you have permits, you cannot give those permits up. Then, you start all over again. ... The airlines [have been saying] when [air travel] comes back, then you can start construction. No. You can’t start construction. Once you lose permits, you have to start all over again. It will take you five-to-ten years or more to build a runway. In the meantime, we lose business,” the mayor said.

“We’re very, very confident where we are. ... We’re not building the runways for the airlines today. We’re building runways for passengers so there’s no delays in bad weather. ... That’s what we build the runways for. They’re not built specifically for an airline. We have all types of airlines coming in and out of there.”

The mayor added, “They don’t want to do it. Simple as that. They agreed to do it at the beginning — American, United, everybody. Now, they disagree. I’m sorry. We don’t build the airport for those airlines. We build the airport for the passengers.”

United and American Airlines, O’Hare’s flagship carriers, have not only refused to fund what they call an “ill-conceived” and disconnected western terminal far from the O’Hare core.

They have also questioned the scope of the entire project, arguing that the airline industry has shrunk significantly since the FAA approved Daley’s “conceptual airfield plan” and that it’s time to take a fresh look.

A spike in fuel prices and a decline in air travel have forced major airlines to announce dramatic cuts in the number of flights and raise passenger fees and fares.

“Recent and rapid adverse changes in the commercial aviation industry make thorough analysis of all financial investments more critical than ever,” the airlines wrote in a 2008 letter written in response to the city’s application to use $200 milion in future passenger ticket tax revenues to fund Phase Two of the project.

“Until a full and robust analysis of the potential scope, cost, implementation and plan of finance of any further airfield development has been completed, it is premature and inappropriate to commit hundreds of millions of dollars in [passenger facility charge] funding toward the complete design of such airfield projects.”