United Has High Hopes for New O'Hare Runway

CHARLOTTE, N.C. -- The nation's long-inadequate aviation infrastructure will get a major upgrade next month, when new runways open at three key airports, including Chicago's O'Hare International.

O'Hare, a hub for both AMR's ( AMR) American Airlines and UAL's ( UAUA) United, is one of the system's key chokepoints, and the third-worst airport for delays in the U.S. during the first eight months of the year. Only 64% of flights arrived on time.

The new runway means O'Hare will have three sets of parallel runways, enabling it to offer three simultaneous departures, even in bad weather.

New runways will also open at Washington's Dulles International, another United hub, and at Seattle-Tacoma International, a growing international gateway and a hub for Alaska Air ( ALK). Operations at both of those airports will benefit, but neither needs the sort of help in relieving congestion that O'Hare requires.

The last time O'Hare opened a new runway was 1971, when U.S. airlines carried about 174 million passengers, or roughly 23% of the total in 2007. The hub system then was in its infancy, marginally in use by Delta ( DAL) in Atlanta, and the associated operational peaks and valleys were relatively rare.

After a new runway opened in Atlanta in 2006, Delta boosted its hourly departures and arrivals by 25% to 35% and saw its on-time performance improve.

In 2004, the Federal Aviation Administration imposed caps that limited O'Hare to 88 departures an hour at peak travel times. Those caps expire Friday night. Because flight caps are being lifted in Chicago, American and United disagree on just how much of a benefit the new runway at O'Hare will provide. This month, United operated about 600 daily O'Hare departures, while American had about 420.

"O'Hare is our largest hub, and we maintain that with the new runway online, we will see a significant improvement in operational performance," says United spokeswoman Megan McCarthy. However, Bob Cordes, American's vice president of operations planning, says the operational benefit "will not be anywhere near the improvement that Atlanta saw" because of the FAA action.

"If you build a bag to hold 10 pounds, and you put 10 pounds in it, you just don't have any buffer for weather," Cordes says. "We saw a bigger bag in Atlanta, and they didn't fill it up. But here, it will probably be filled, so reliability is not going to improve."

Cordes said an analysis, prepared early this year by American and United, showed that in 2005, Atlanta's airport had 89 hourly daytime arrivals, or close to 100% of its capacity. With the new runway, capacity expanded to 115 hourly arrivals, while demand expanded modestly, enabling the airport to operate at 81% of capacity and driving operational improvement.

By contrast, he said, O'Hare operates today at about 98% of capacity, with 89 hourly arrivals. The new runway will increase capacity modestly. If arrivals remain constant, the airport would operate at 93% of capacity. But with caps ending, "we don't know what will happen to demand," Cordes says. Both hub carriers plan winter flight reductions.

"With capacity reductions, we anticipate seeing improved performance," said United's McCarthy.

Meanwhile, FAA spokesman Tony Molinaro says the new runway represents an incremental step in the planned O'Hare expansion. "This small 7,500 foot runway will help a little," he says. "But it's just a start. It's the easiest one to add, because it's away from the others."

The new runway should allow an additional four or five hourly arrivals and reduce delays by 4% to 5%, but "we never said this was a major runway," Molinaro notes. Over the next several years, two more runways are planned, although funding has not been secured. The added runways are expected to reduce delays by about 30%.

Aviation consultant George Hamlin says that even without caps, O'Hare is a difficult place to set up shop. "American and United have the place locked up," he says. A low-cost carrier like JetBlue ( JBLU) could operate at O'Hare, but only minimally.

"If you are Delta, you might put in one or two flights, but you won't be mounting a major attack on Chicago," he contends.

Overall, experts say, delays at O'Hare are easier to address than those at the New York airports, because New York suffers from congested airspace, clogged by traffic at multiple airports and a high number of business jets. By contrast, O'Hare's congestion is largely a ground issue that can be addressed by more runways.

Still, consultant Mike Boyd says more help is required. "Once these airplanes get in the sky, they are still directed by an air traffic control system that is 50 years out of date," he says. "O'Hare runways could make a difference, but the real problem is getting airplanes to and from those runways."

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