Credit crunch delays bid to privatize Chicago's Midway
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Efforts to privatize Chicago Midway have hit a snag. With the economic crisis tightening the credit market, a group of investors that had sought to buy a 99-year lease of the airport is having difficulty raising enough money to complete the deal. In October, the consortium, led by Citigroup's Citi Infrastructure Investors, agreed to pay the city $2.5 billion for the lease, which would make Midway the first major domestic airport to be privatized.
The city of Chicago will give the investors, which also include YVR Airport Services and John Hancock Life Insurance, up to six more months to raise the money, says Jodi Kawada, a spokeswoman for Mayor Richard Daley. The parties had set Monday as the original deadline.
"The global economic recession is obviously having a substantial impact on the availability of financing," Kawada said, in a statement. Chicago would keep the $126 million letter of credit it received from the investors even if the deal falls through.
Chicago Midway was one of the earliest applicants for the federal experiment to allow privatizing up to five U.S. airports, only one of which can be a hub airport the size of Midway.
•It was the end of an era at Minneapolis-St. Paul last week, when Northwest Airlines signs were swapped for Delta banners.
Northwest, which started in 1926 as a Minneapolis-Chicago mail route carrier, merged with Delta last year, and the combined company is in the midst of phasing out Northwest's name.
Some other operational details, such as software integration and union contracts, haven't been completed. Agents still process the carriers' tickets separately during check-in. A vast majority of Northwest planes have yet to be repainted.
•Chicago O'Hare has installed 50 touch-screen computers throughout the terminals for travelers wishing to browse through the city's tourism website. The site contains local information, including restaurants, neighborhoods and maps.
•Buffalo Niagara International is the latest airport to allow banner ads or public-service announcements in the baggage claim area, where travelers become a captive audience as they wait for their luggage. Roswell Park Cancer Institute, a local cancer research center, will run floor ads with tips on how to reduce cancer risks.
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•JetBlue says it may leave Long Beach Airport if its facilities aren't improved more quickly.
JetBlue, which considers Long Beach its West Coast hub, says it wants to see improvements in the terminal and parking facilities. Its gates are currently in temporary trailers.
"We have to take into consideration the airport experience of our customers. There are some improvements promised by the city and the airport that haven't come to fruition," says JetBlue spokesman Bryan Baldwin. "Our customers love the airport. We just want to see action. It's not a threat in any way."
The airline has no concrete plans to leave the airport, but it could cut back flights or shift service to other Southern California airports, such as Los Angeles International, where it will launch service to New York Kennedy in June.
Long Beach Airport spokeswoman Sharon Diggs-Jackson says the recession has taken its toll. The airport will break ground on a new parking garage later this year, but the terminal upgrade "is taking longer than anticipated."
"We're going to continue forward," she says.
•Southwest says it will expand operations at Minneapolis-St. Paul with new daily service to Denver starting on May 26. The carrier opened shop at MSP last month when it began flying to Chicago Midway.