Midway Airport Gets Financing For New Terminal

<FONT SIZE="+3"><B>Midway Airport Gets Financing For New Terminal</B>

By Mary Ann McNulty

<I>Chicago </I>- Midway Airport is getting a new terminal, parking garage and other enhancements as part of a $722 million overhaul backed by Southwest Airlines.

As Midway's biggest tenant, with 47.6 percent of the passengers, Southwest is backing the revenue bonds that Chicago will issue to fund this project, committing to repay the debt through landing fees and terminal rent, provided the city continues to operate the airport. To begin the project, the city last month issued $254 million in revenue bonds.

Work, expected to last six years, is set to begin next year with the relocation of Cicero Avenue; construction of a six-level, 3,000-space parking structure; relocation of Chicago Transit Authority parking and an underground utility work. For travelers, the most important part of this project will be the new terminal and expanded concourses, which will open in phases to allow for uninterrupted airline operations. The existing terminal and concourses will be demolished, much to the delight of passengers tired of dodging the raindrops and buckets during rainy days on the southwest side. The terminal was built in 1947 to accommodate DC3 propeller planes. The gates and passenger hold areas are way too small for Midway's fleet mix of 737 and 757 aircraft, city officials said.

Although the Midway redevelopment was announced by Mayor Richard Daley in late 1994, lack of funding prevented the city from beginning work on the project. Midway Airport has grown considerably since lead carrier Midway Airlines went bankrupt in 1991, leaving just four carriers to serve the airport's 4 million passengers. (The airline has since reorganized and now uses Raleigh/Durham, N.C., as its hub.)

In 1995, Midway's 15 carriers served more than 9.9 million passengers. Midway's current carriers are Air South, American Trans Air, America West, Continental, Frontier, Myrtle Beach, Northwest, Prestige, Southwest, Vanguard, Western Pacific, Chicago Express, ComAir and GreatLakes. Until it stopped flying, Kiwi also used Midway.

Starting at Midway in 1985, Southwest began beefing up service in 1991 when Midway Airlines went belly up.

"There are many factors that helped revive Midway Airport. But every step of the way, Midway's rebound has been led by Southwest," Daley said. "Southwest understands the importance of airports that are easily accessible to downtown areas."

Added Herb Kelleher, Southwest's chairman and CEO, "It's evident that Chicagoans have embraced the convenience of Midway Airport-Southwest Airlines has more than doubled its number of daily flights and direct destinations from Midway in the past five years."

As part of the memorandum of understanding Kelleher signed to back the bonds, he stipulated that the deal is good as long as the city continues to operate Midway Airport. The provision was added to ensure that Southwest won't be locked into the deal should Illinois' governor or legislature again attempt to take over the airports controlled by Chicago. Gov. Jim Edgar has been pushing for a third airport at Peotone, but the plan has yet to get off the ground (<I>BTN</I>, June 24).

In the latest twist in this ongoing battle between Daley and Edgar over control of the airports, the Illinois Legislature this month approved a bill allowing a state takeover of Meigs Field. Located near downtown, Meigs has been used mainly by corporate jets, helicopters, commuter airlines and Edgar. In September, the city closed Meigs with plans to demolish the terminal and turn the island into a $27.2 million park.