warreng24
Posts: 574
Joined: Fri Nov 18, 2005 9:38 am

Chicago MDW To Be Sold To Investors

Tue Feb 13, 2007 12:07 am

Didn't see this posted yet.... (Mods please delete if a duplicate).

http://money.cnn.com/magazines/fortu...7/index.htm?postversion=2007021205


"Goldman Sachs, Deutsche Bank, Australian infrastructure specialist Macquarie (Charts) and Spanish airport operator Ferrovial are all circling the 750-acre Chicago airfield, which could fetch up to $3 billion. "

"Then there are the economic issues - 65 percent of the carriers at Midway have to approve the transaction, and they may require that landing fees (the charges they pay to the airport operator) be capped. The bidders, on the other hand, will push for a fee schedule that gives them a decent return on their equity. In the past, airlines have argued that privatization can exacerbate an airport's natural monopoly if landing fees and other economic concessions are not regulated."


WN is one of the largest carriers active at MDW. If the sale goes through and landing fees increase, could we potentially see WN move to one of the other Chicago area airports?
 
xjet
Posts: 415
Joined: Fri Feb 02, 2007 10:09 am

RE: Chicago MDW To Be Sold To Investors

Tue Feb 13, 2007 12:17 am

Quoting Warreng24 (Thread starter):
WN is one of the largest carriers active at MDW. If the sale goes through and landing fees increase, could we potentially see WN move to one of the other Chicago area airports?

I would think WN would stay. They have invested way too much into that airport. It is an interesting situation though. We can all look to ELP to see how WN handles high fee airports.
 
Cubsrule
Posts: 12491
Joined: Sat May 15, 2004 12:13 pm

RE: Chicago MDW To Be Sold To Investors

Tue Feb 13, 2007 12:40 am

Quoting XJET (Reply 1):
I would think WN would stay. They have invested way too much into that airport. It is an interesting situation though. We can all look to ELP to see how WN handles high fee airports.

Nowhere else in the area has the space for WN. If WN were to pull back due to increased fees, FL would expand in a heartbeat.

And if it requires 65% of the 8 carriers at the airport, that would mean that if TZ and WN oppose the deal, every other carrier would have to be in favor of it.
I can't decide whether I miss the tulip or the bowling shoe more
 
sphealey
Posts: 292
Joined: Tue May 31, 2005 12:39 am

RE: Chicago MDW To Be Sold To Investors

Tue Feb 13, 2007 12:43 am

How many here remember who the original owner of MDW was?

sPh
 
xjet
Posts: 415
Joined: Fri Feb 02, 2007 10:09 am

RE: Chicago MDW To Be Sold To Investors

Tue Feb 13, 2007 12:43 am

Quoting Cubsrule (Reply 2):
And if it requires 65% of the 8 carriers at the airport, that would mean that if TZ and WN oppose the deal, every other carrier would have to be in favor of it.

Oh yeah. I totally think they wil stay 100%. It will just be interesting to see the airport have a hand over WN.
 
jakbar
Posts: 423
Joined: Fri Oct 10, 2003 3:47 am

RE: Chicago MDW To Be Sold To Investors

Wed Feb 14, 2007 12:06 am

For the sake of clarity, MDW is not being "sold", but instead is being "privatized", a completely different concept. The City of Chicago will continue to own MDW.

Quoting Sphealey (Reply 3):
How many here remember who the original owner of MDW was?

I believe the Chicago Board of Education originally owned the land. If I'm not mistaken, they owned the land well into the 1980s.

[Edited 2007-02-13 16:08:10]
 
sphealey
Posts: 292
Joined: Tue May 31, 2005 12:39 am

RE: Chicago MDW To Be Sold To Investors

Wed Feb 14, 2007 12:39 am

> I believe the Chicago Board of Education originally owned the land.
> If I'm not mistaken, they owned the land well into the 1980s.

Correct, although I am not sure if the BoE ever owned the facilities. IIRC the land was sold to the City of Chicago in either 1979 or 1980.

sPh
 
FWAERJ
Posts: 2674
Joined: Wed Jun 07, 2006 1:23 am

RE: Chicago MDW To Be Sold To Investors

Wed Feb 14, 2007 5:39 am

Quoting Jakbar (Reply 5):
For the sake of clarity, MDW is not being "sold", but instead is being "privatized", a completely different concept. The City of Chicago will continue to own MDW.

To put it into perspective, it's sort of like what BAA does at IND.

Anyhoo, it doesn't surprise me that Macquarie is in the bidding... a joint-venture group between them and Cintra leases the Chicago Skyway from the City of Chicago (along with the Indiana Toll Road on the other side of the state line). Given the "corrupt but effective" nature of Chicago politics (thank you, Mayor Daley), I think that Macquarie will win this one by default. This reminds me of the time when McDonald's (based in the Chicago suburb of Oak Brook) won the fast-food burger bid at ORD becuase they were "local" (and Daley got a lot of kickbacks from McDonald's), even though a local Burger King franchisee based in Chicago proper said "we're just as local as McDonald's".

BTW, before I moved to the FWA area, I lived in NW Indiana, so MDW and ORD were my hometown airports (though if GYY had decent service, we would have used it).

[Edited 2007-02-13 21:41:01]
All opinions stated are strictly personal and not those of the FWACAA or my employers.

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