September 30, 2005

FAA approves Chicago airport expansion plan

By Karen Pierog

CHICAGO (Reuters) - The Federal Aviation Administration
gave final approval on Friday to a $7.5 billion plan to
overhaul Chicago's O'Hare International Airport in an effort to
tame flight delays, the agency's administrator said.

"O'Hare is now cleared for take-off," FAA administrator
Marion Blakey told reporters on a conference call, adding the
project will result in more flights and improved on-time
performance at the world's busiest airport in terms of
take-offs and landings.

The agency in July released a final environmental impact
statement that concluded the O'Hare Modernization Program
offered the lowest level of average delays and the greatest
savings in delay costs, with minimal additional impacts on the
environment, compared with alternative plans.

The approval put two nearby suburbs and a cemetery opposed
to the project on a collision course with Chicago Mayor Richard
Daley, who was scheduled to break ground on the project later
on Friday.

The suburbs and cemetery, which stand to lose property to
O'Hare, asked a U.S. appeals court in Washington, D.C. on
Friday to stay the FAA's decision until the court has examined
"significant legal defects" in that decision.

"The FAA's approval would allow the destruction of homes
and businesses in our communities before the agency even
decides whether the (program) makes economic sense or can be
financed," said Bensenville Village President John Geils, in a
statement. "It's 'destruction before decision' and it's against
federal law."


Blakey said flight delays, which ripple from O'Hare across
the U.S. air traffic system, should be cut by 66 percent in
good weather and 68 percent in bad weather as a result of the
project which adds, relocates and extends runways, builds a new
western terminal and calls for other improvements.

The U.S. Department of Transportation's inspector general
has questioned the costs and benefits of the project.

In a report this summer, the inspector general called on
the FAA to verify that the project's costs, schedule and
funding sources are realistic, reasonable and credible,
pointing to the likelihood the price tag will increase.

That report also tied projected cuts in air travel delays
to the FAA completing substantial changes to the airspace in
the Great Lakes region.

Blakey said the airspace reconfiguration plan was under way
and expressed confidence in the city's financing plan, which
taps federal airport grants, bonds backed by airport revenue,
passenger facility charges and third-party financing.

"We believe this is viable, we believe this is practical
and we believe the money will be there," Blakey said.

The FAA has yet to release a decision on Chicago's request
for federal airport improvement grants, which make up about 9
percent of the cost, agency officials said.

Chicago is scheduled to sell $1.5 billion of new and
refunding general airport revenue bonds in mid-November through
Citigroup Global Markets, according to Lisa Schrader, a city
budget department spokeswoman.