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O'Hare Expansion's $15-20 Billion Price Tag Will Harm America's Airports

Posted on: Wednesday, 20 July 2005, 09:00 CDT

WASHINGTON, July 20 /PRNewswire/ -- The City of Chicago is asking the Federal Aviation Administration (FAA) for an unprecedented share of the FAA's airport grants budget to fund the proposed O'Hare Modernization Project (OMP). Chicago's request for FAA grants, if approved, would have an enormous financial impact on airports across the country.

In order to finance the O'Hare expansion, Chicago is requesting $300 million in grants from the FAA for Phase One alone and would require at least $800 million -- and likely much more -- in FAA discretionary grants for the full project. The requested grants would be dispersed from the Airport Improvement Program (AIP) fund, which allocates money each year to public airports nationwide for planning and development projects. Chicago's request would account for close to 20% of the total FAA Discretionary Budget.

"O'Hare will be the whale in a fish bowl and its AIP requirements will swallow a large portion of the AIP funds available for the nation's other airports," said Joe Del Balzo, aviation expert and former Acting Administrator of the FAA. "In today's environment when airports are requesting more assistance in federal grants to improve safety, security, capacity and other projects, granting funds of this magnitude to one airport will result in a reduction in FAA funds available for other airports and will affect the ability of airports to make necessary improvements in these areas. The OMP will have a significant financial impact on airports around the country."

The FAA's FY04 AIP budget totals $3.5 billion. Of that, $3 billion is earmarked for entitlement grants which are calculated and allocated based on a set formula and specific set-asides. The remaining $531 million is distributed by the FAA at their discretion (a portion for capacity, safety, security and noise, and, the remaining as pure discretionary). Many airports rely heavily upon the discretionary funds to meet much needed facility improvements.

Last year, many airports were awarded more discretionary funds than entitlement funds in order to pay for runway improvements, safety and security projects. If Chicago's request is granted by the FAA, the rest of America's airports would get, on average, 20% less in discretionary funds and more importantly, less for capacity, safety and security projects.

"There's a finite and diminishing pool of money left to the FAA's discretion on who receives it and when," said Del Balzo. "Even if some airports aren't individually affected by Chicago's request because they may have already received AIP funds for their own projects, most airports will feel the impact of Chicago taking a very big part of the finite pot of money over the next ten years."

"We urge Members of Congress to evaluate whether or not Chicago's costly proposal is worth taking so much of the available AIP funds away from the nation's airports," said Craig Johnson, Mayor of Elk Grove Village, Illinois.

A compiled list of airports, how much they received in entitlement money and how much they received from the discretionary budget is available upon request (email bschulte@wmspublicaffairs.com). Additionally, the information can be found on the FAA's website, FAA FY05 AIP Grant/Appointment Data, at http://www.faa.gov/arp/financial/aip. If Chicago is granted its $300 million request, the impact on each airport will be approximately 20% less than what is shown on the chart, which will jeopardize necessary improvement projects at airports across America.

Opponents continue to base their criticism of the City's OMP on many reasons including blatantly understating costs and exaggerating benefits by using outdated flight volume information in order to meet necessary FAA requirements for financial assistance.

Additionally, the City has yet to address where sources of funding will come from to pay for the growing cost of the total project. Last week, the FAA stated that the City must include the construction of a new "LL" taxiway in its Phase One expansion, which was mysteriously missing in the City's most recent airport layout design because the airlines refused to pay for it. The taxiway is a key component to address safety concerns to ensure that taxiing planes do not have to cross departing or landing plane paths. The City's current financing plan, which includes the requested AIP funds, does not have the $200 million needed to finance the taxiway.

Community leaders, concerned citizens, aviation industry leaders and economic experts continue to urge the FAA to look into current viable alternatives such as runway configurations which were proposed by the Chicago air traffic controllers, use of congestion management techniques and reliance on other airports including the new south suburban Chicago Abraham Lincoln National Airport.

A decision from the FAA is expected as early as September.

Bensenville Village; Elk Grove Village

CONTACT: For media availability with leading economic aviation expert orfor further details: Beneva Schulte, +1-202-261-4027,bschulte@wmspublicaffairs.com, or Christy Moran, +1-202-261-4034,cmoran@wmspublicaffairs.com, both for WMS

Web site: http://www.wmspublicaffairs.com/http://www.faa.gov/arp/financial/aip

Source: PRNewswire

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