O' Hare Airport gets nod for $1b bond issue

The Chicago City Council has given approval to O'Hare International Airport on the issue of US$1 billion of revenue bonds for its expansion, reported Reuters.

But the two major carriers at the airport are not saying if they plan on fighting the debt sale.

A spokesman for American Airlines said there was "no comment at this time".

Jean Medina, a United Air Lines spokeswoman, said, "We continue to be in discussions with the city about reaching a fiscally responsible plan to improve O'Hare."

Aldermen raised concerns about issuing the passenger facility charge and third lien general airport revenue bonds without the approval of airlines at O'Hare as required under a 2005 agreement.

Rosemarie Andolino, Chicago's aviation commissioner, told the committee there is a possibility the airlines may sue over the bonds, but that she believed a resolution will be reached with the airport's carriers.

In February, United and American baulked over signing onto the second phase of a massive expansion and improvement project at O'Hare after they were hit with fee and rental increases.

Aldermen were this week assured that payment of the bonds was dependent solely on pledged revenue – per passenger charges authorised by the Federal Aviation Administration and revenue generated from airport fees and charges – and not on any city tax revenue.

Chicago plans to sell the bonds through Citigroup in January in order to have the cash in hand to commence work on new runways in the spring, city officials said.
(Source:www.cargonewsasia.com)