Airlines sue Chicago to halt expansion borrowing

United and American airlines are suing the city of Chicago to stop a borrowing plan to finance expansion at O'Hare International Airport.

The suit was filed Tuesday in Cook County Circuit Court.

Airline officials contend they have the right through their companies' respective contracts with the city to approve or deny capital projects at the nation's second busiest airport. The suit complains that without airline approval, the city is “saddling” the airport with billions of dollars of debt that raises airlines' cost of doing business while the industry is suffering from the recession.

The contention centers around the expiration date of the airlines' contracts with the airport. Airline officials believe all capital projects must be approved by the airlines. But the city argues the airlines have no say since the airlines' contracts are set to expire before debt payments are due to begin.

The lawsuit states that the two airlines make up 80 percent of O'Hare's domestic flight traffic.

The airlines are asking the judge to stop the city's plans to build two new runways, an extension to an existing runway and the various infrastructure that goes along with that construction, according to the lawsuit. The suit estimates the cost of the proposal to be at about $3.4 billion, with the airlines on the hook for 58 percent of those costs.

Airline officials contend there is no need for the expansion and modernization at this time. The suit states that O'Hare operations were down 6.1 percent in 2009 from the previous year. Almost 32 million people traveled through O'Hare in 2009, according to the suit. But that's 6 percent less than 2008 and 10 percent less than 2007, the suit states.

City aviation department officials said they're moving ahead.

“The city of Chicago continues to move forward to secure funding for the O'Hare Modernization Program and believes it has the legal right to do so,” said Aviation Department Commissioner Rosemarie Andolino in a statement released Tuesday evening. “The (program) is creating jobs and stimulating the region's economy at a time when it is critically needed.”

It's unknown when the sides will meet in court.