It took me some time, because the Chicago Department of Aviation made me submit a FOIA request to get the new proposed gate allocation map at O’Hare AND, of course, I was on spring break with the family. But I have the map, and ooh boy is it different than I thought. United is jumping with joy while American is steaming with anger. The assignments, however, don’t get finalized until June 1, and American has wasted no time in trying to fight this.
A United Hope
Let’s start with what happened. If you recall, I thought United would pick up the equivalent of six gates — I say “equivalent” because it’s based on “linear frontage” of the gates as I explained in a previous post — Spirit would gain 1, Alaska would lose 1, Delta would lose 3, and American would lose 3. I thought it might look like this:
I had United, Alaska, and Delta correct, but Spirit didn’t gain anything. Air Canada lost a gate, but American lost somewhere between 4 and 6 gates. How did that happen? I did not realize that Southwest wanted in. It picked up three gates of its own instead of just using common-use gates as it had previously.
Now, keep in mind that Spirit had already swapped its four gates on the L concourse to the G concourse with American. That means some things had already been made easier. So with that knowledge, here is what is being proposed:
The Losers
- Air Canada loses one of its two gates on E
- Alaska loses its two gates on E and picks up one on G instead (which is better for the American partnership anyway)
- American loses nine-ish gates — depending upon how they are configured for regionals or narrowbodies — on G, almost the entire concourse, and then gains the three gates at the top of the L-stinger for a net loss of six as I count it, but I believe the official word is a loss of four gates, so I can’t quite figure this out
- Delta loses three gates on M in Terminal 5
- JetBlue loses its only gate on G, presumably forcing it into common use on that concourse
The Winners
- Southwest picks up the three M gates that Delta gives up
- United gains the one from Air Canada and two from Alaska along with the three on G that are closest to its other gates for a total of six
But wait, you say, this isn’t even. And you’re right. That’s because one gate on G will now be “unassigned.” Further, while the three common-use gates on the L-stinger go to American, five-ish gates on G will now be common-use. That evens it out if it is six gates that American loses. That’s where things are a little vague.
You know what? Let me just show you the proposed map:
Image via Chicago Department of Aviation
There are a couple of quirks here, but effectively United owns Terminals 1 and 2 while American owns most of 3 except for the G concourse which is for the cats and dogs. Over in Terminal 5, Southwest grabs three gates that split Delta. Why? I don’t know why Southwest wasn’t pushed to the end, but Delta was never going to give up that southernmost gate which is closest to the lounge.
There are a lot of details, but most don’t matter that much. What matters is that United would gain six gates and American would lose four to six. That is a huge swing in capacity. American knows it, and it has objected.
The Empire Strikes BAAck
In letters written to the authorities, American says that gate reallocation process is illegal due to the terms of the airline use and lease agreement they all signed in 2018. It points to the key section 5.3.2. I’m sure you’ve all memorized it by now, but just in case:
5.3.2 Upon the completion of the T-5 Extension and the relocation from the Main Terminal to Terminal 5 of one or more Long-Term Signatory Airlines, the City shall cease the annual redetermination of Gate Space currently in process, if any, and shall not initiate the next annual redetermination of Gate Space until April 1 of the year following the end of the Gate Space Ramp-up Period, as defined in Section 5.2.4.
Well, ok, but Terminal 5’s extension was finished and Delta moved more than two years ago. So what’s the problem? Well, let’s just take a little trip over to 5.2.4 and learn about this Gate Space Ramp-up Period:
5.2.4 Upon the completion of the T-5 Extension and the relocation from the Main Terminal to Terminal 5 of one or more Long-Term Signatory Airlines (“Relocating Airlines”), the City shall allocate Linear Frontage in accordance with Exhibit D-1.3 with such assignments to remain in place for a period of at least twelve (12) months (“Gate Space Ramp-up Period”).
Specifically, it’s Exhibit D-1.3 that American thinks should blow this whole thing up. What is that? It’s this, which you might remember from my previous post on the topic:
This image shows the three northern gates on the L-stinger as being common-use. Since those couldn’t be assigned as common-use until they were completed this very March, American says there can be no reallocation until 12 months from that date.
For its part, a spokesperson for the Chicago Department of Aviation told me this:
The City believes that the conditions for a gate redetermination under the O’Hare Airline Use and Lease Agreement have been met. The CDA continues to engage in productive discussions on the topic of redetermination with all airline partners and will not comment further at this time.
United, for its part, wouldn’t comment at all. That makes sense considering this is a dispute between American and the city.
The Return of the JDs
I am not a lawyer, obviously, but American’s argument seems pretty flimsy. After all, this says the trigger for the 12-month freeze is the completion of the Terminal 5 extension and subsequent move-in of the tenants. American’s argument hinges on these three common-use gates shown in Exhibit D-1.3 but otherwise unmentioned.
Then again, American did show that it has other correspondence where it requested clarification on this from the city previously and had received what it believed to be confirmation of its position. It’s not as easy for an outsider to see that, however, because I’m reading this second-hand. Ultimately, it doesn’t matter what I think anyway.
My guess, and this is not based on any direct knowledge, is that American got caught flat-footed. United was just waiting to pounce and prepped to take all those gates away by raising utilization. Then, once American realized how much it had screwed itself by keeping Chicago flying so low, it went on a desperate scramble to find anything that would nullify the award. This is its best shot.
Assuming the city does not backtrack on this, I assume it’ll end up in the courts for a judge to decide. So, everyone just hang on tight while this all gets figured out. June 1 should be when we know exactly how this plays out.
32 comments on “American Loses Even More Gates in Chicago, But It’s Not Going Down Without a Fight”
Sounds like there will be plenty of popcorn (Garrett brand, of course, as sold in stands next to seemingly every 2nd gate in ORD), legal fees, and ink consumed as this battle unfolds.
I look forward to Dave’s jokes on Friday about this, along with the mandatory and gratuitous (but always amusing) cheapshot at EWR.
“United’s Great Chicago Gate Grab: AAmerican wants second bite at the AAple at ORcharD Field” is the best headline that I could quickly come up with, but I’m sure there will be much better ones in the comments below and on Friday.
So in terms of existing banks for both airlines, just how many potential flights are affected?
David C – It doesn’t really work that way. American has been underutilizing its gates so much that it shouldn’t have much trouble running its operation with the new level of gates. Then again, it has now poured so much extra capacity in this summer that it may have to backtrack in the fall. United can just keep on growing as it adds more gates.
American got pAAntsed in ChicAAgo while they were focused, as usual, on DallAAs and ChAArlotte. LAAther, rinse, repeAAt!
Realistically, how many flights can a single gate turn at ORD in a day? The answer could determine the real win for United & loss for American.
Surprised Southwest were granted three gates of their own. Were they flying the hell out of the common use gates to receive them?
Realistically, how many flights can a single gate turn at ORD in a day? The answer could determine the real win for United & loss for American.
Surprised Southwest were granted three gates of their own. Were they flying the hell out of the common use gates to receive them?
SEAN – It really just depends how you use the gates. You could turn a lot more quickly if you use the gates for 50-seaters than for an A321neo, but that also determines how many gates you can fit into the frontage area.
It’s not simple math without knowing what United’s plans are, I’m afraid.
As for Southwest, I’d expect it won’t hold on to these gates for long. For the first five months of 2024 it was flying about 25 daily departures.
Starting in June 2024, that was halved. Since this is based on full year 2024 flying, it was enough to get 3 gates with an average of 19x daily.
But 2025 is currently at under 13x daily, so I’d imagine it will lose a gate in the next go-round.
Should have specified based on aircraft type, but thanks Cranky!
There’s something I came across years ago at LAX that involved two particular gates 37A & 37B & how they swapped between so many airlines over the years. I believe they were associated with TW, then NW although they were in T2, then AA although they were in T4 & now as most here remember the move DL made a few years ago to T2 & T3 so it would be easier when connecting to Bradly as well as part of the airport renovation.
AA is not some tiddly little outfit with just a couple of puddle-jumper Cessnas – they’re a major airline with tens of thousands of employees – and those employees are meant to know what they are doing. How did AA screw up so much and who gets fired because of it ?
I assume that’s Vasu who will get blamed and he already got fired. So there you are…
Remarkably it’s not the first time. During the NEA trial it was reported that AA lost several gates at JFK a few years prior because they didn’t utilize them.
I don’t get the WN thing. ORD isn’t exactly breaking records. By their own admission what you see is what you get in terms of near term growth. Is this wishful thinking for CDoA?
Eric – This is all by the book based on 2024 flying. There is no special math here. It’s just that Southwest has pulled back since then, so it won’t keep all three for long.
Why isn’t Delta fighting for its gates? I fly them frequently and almost everyone has a plane on the jet bridge. And why not give Southwest the crappy M2-4?
Angry Bob – I’m sure Delta is just happy letting American try to fight this battle. But Delta in no way needs all those gates. It has less than 40 daily flights at the airport and should be happy to have as many gates as it’ll get. As for why they picked the gates they did, that’s unclear to me but as someone else said, Southwest might need larger holdrooms.
I fly DL out of ORD almost weekly and I don’t think I’ve ever seen anything bigger than a 717 at M2-4. It may be that Delta prefers the smaller jets down at the end but I wouldn’t be surprised if WN’s 737s just wouldn’t fit there.
My guess on the DL split is 1) the SkyClub location is closer to the lower-right gates in the main part of the terminal, so they wanted at least one gate right outside of the club while 2) the gates in the upper left (per Google Earth view) look like they would be tight with 737s and better accommodate regional/A220s, so WN couldn’t park up there?
I don’t understand why Delta would give up prime gates and be split. Give SW the scrap gates at the end of the concourse. If their jets don’t fit it’s not their problem
In the last picture, G4 G6 might have been common use currently instead of AA’s? In this case, the city would count that AA is losing 4 gates not 6. At T5, northern gates (M2 especially) are for regionals that the city might thought it’s best to put WN more preferred gates. Since WN will reduce ORD flying WN would swap some of them in normal times but WN has too much beef with DL (DAL etc) that that won’t happen.. WN may sublease to F9 if such arrangement is allowed. DL may team up with AA for the lawsuit? Always appreciate your interesting posts !
hk,
You don’t know City of Chicago math!
hk – That last picture was just the proposed distribution, but there is also a lot of noise because there has been construction going on at some of AA’s gates. Chances are, AA can still keep using a lot of those gates on G but just under common-use rules. I don’t know that there would be many others trying to use them all anyway. But that’s why I left it kind of murky between 4 and 6 gates.
Guess that G concourse Admirals Club will close (and become yet another United Club?).
It should have been obvious during covid and even before that AA was messing w/ fire by prioritizing some hubs over others; given how low AA’s profitability has been for years, it is obvious that some of its hubs don’t make money on a consistent basis.
AA simply needs to remain large enough at ORD to serve the local market; the number of seats and flights a carrier operates in a market is proportional to the share they have and connecting passengers do provide the volume to support higher market share.
ORD has functioned as a two airline hub and is being rebuilt as a two airline hub. It already has the highest costs per enplaned passenger of any interior US connecting airport and those costs will only grow as the Global terminal is built. ORD cannot economically function as a hub solely for United.
this gate fight is between AA and UA is really about who is going to survive as hub carriers – and bear the costs associated with the rebuild of the terminals.
Whatever happens in terminal 5 is not really part of the issue. DL is THE long-term signatory airline that moved from terminal 2 to 5 and they do not seem to need any more space. WN may or may not even survive at ORD but DL doesn’t seem to have any problem w/ WN taking some of the gates that DL previously had. They are of no use to AA or UA.
and let’s look south to Dallas Love Field to be reminded that a city and its primary tenant were convinced they were right about WN’s right to expand. It was DL that fought to be able to continue to fly from Love Field, took the case to the appeals court, and ultimately prevailed at getting its own gate, dealing a loss to WN and the City of Dallas.
Airline and airport/cities don’t get into legal conflict often but when they do it is far from certain that the outcome will be as many assumed.
and if AA really does lose, then it is time to start thinking about the implications for AA’s larger presence in Chicago, the Midwest, and its overall network and viability.
Since AA reports its earnings later this week, we might get some more clarity if an analyst asks a question.
“ORD cannot economically function as a hub solely for United.”
This is a critical claim. Care to expand on why?
Is your assumption that if AA abandons the hub that the total passengers carried through ORD would go down?
the Chicago local market is not going to grow.
If AA fails to maintain its current local market share, then that local market could pass to UA – or it could be split up among multiple airlines.
If you look at DL’s exit from DFW as a hub – about 20 years ago – DL only had about 15% local market share which was multiples less than AA had. DL has fairly consistently over time maintained its position as the 2nd largest carrier at DFW but AA did increase its share of the local market.
The same thing could very well happen at ORD.
Local Chicago passengers pay for the cost of the airports where they begin or end their travel but the cost of connecting passengers is essentially carried by the airline that hubs there.
The difference is the connecting traffic and what it costs for AA or UA to carry it there vs. other hubs. It costs about $20 more per passenger to connect a passenger over ORD than over more cost efficient hubs including DL’s DTW and MSP hubs or other hubs outside of the Midwest.
From a pure economics standpoint, it doesn’t make sense for any airline to hub over ORD if they have better alternatives. But connecting traffic helps increase the size of operation which builds the local market share.
ORD is undergoing a massive rebuilding that will probably be the most expensive US airport rebuilding in a generation – and it is based on having two airlines.
UA can either run a massive connecting operation and subsidize connections over ORD compared to other more cost efficient hubs or run AA out of town, grab the majority of the local market and then reduce the amount of connecting traffic which would send the price for local passengers much higher.
it’s not clear how this will play out but it should far from certain that it is good for UA or for Chicago for UA to dominate at ORD by AA being weaker and potentially walking away from ORD as a connecting hub, even if they can figure out a way to replace their Midwest connectivity
The Midwest was overbuilt with hubs from deregulation until the round of consolidation that created the big 3 megacarriers. It might not be settled yet. The difference is that cities like PIT and CVG have fairly underutilized terminals that were built for large hub operations with economics at those airports largely not out of line with other airports. That cannot happen at ORD based on the massive rebuilding plan as it is underway right now.
Tim, you make some great points, however I am not sure I fully agree with your assessment of ORD – “ORD cannot economically function as a hub solely for United.”
If you look at the largest metropolitan areas of the US (https://en.wikipedia.org/wiki/Metropolitan_statistical_area), all of them, with the exception of Los Angeles, are supporting major hub operations –
1. NY – Newark, NJ – Support JetBlue at JFK + United at EWR
2. LA
3. Chicago – ORD supports both UA & AA – MDW supports SW
4. Dallas – DFW supports AA – DAL supports SW
5. Houston – IAH supports UA – HOU supports SW
6. Miami – supports AA
7. Washington DC – IAD supports UA
8. Atlanta – supports DL
If AA were to draw down flying at ORD, and eliminate it as one of its major hubs, ORD would be dominated by UA as you note. However, the Chicago metro area would still have 2 hubs and 2 hub airlines in this scenario – UA at ORD, and SW at MDW. This would be more akin to what has happened in the DFW metroplex, with AA dominating at DFW and SW dominating at DAL, as opposed to a situation such as Atlanta, where you have DL as the sole, dominate airline.
The Chicago metro area is currently ranked 3rd largest in the country, at 9.4 million residents. That should be more than enough population to support a 2-hub / 2-airline system. After all, how has Atlanta managed to be so successful with just DL as the dominate hub airline, with a metro population of just 6.4 million? (that is a full 3 million less that the Chicago metro area)
Delta Sky lounge is at Gate M14.
I just flew out of ORD on WN and the airport staff said they were going back to gates M2,M3 and M4.
M2 will be shares with F9.
I wonder why southwest would bother talking more slots at ORD when they have mdw
Trying to be on both sides of Chicago is my guess. Remember Southwest serves every airport around LA with a decent presence. In the cases of Burbank & Long Beach they are the #1 carrier.
The WN adds are based on their schedule before their most recent cutbacks – if they stay at their current level they’ll give the new gates back in the next allotment round.
I’m not quite sure what WN’s strategy at ORD will be going forward – ORD and MDW are roughly the same distance apart as BUR and LGB are from LAX, but WN is nowhere near as large at ORD as it is at LAX (and LAX isn’t a huge hub for anyone.) With all the Elliott fallout and WN’s other challenges, I still wouldn’t be surprised to see it withdraw from ORD entirely, especially if we go into a recession in the coming months.
Two questions:
1. Does AA plan to keep its club on G?
2. If there are common gates available, why would an airline like Southwest care if they use their own or one of the common gates on G? Is there a cost difference?
I meant (G or M) :)