These are turbulent times for airlines, as the spate of industry mergers shows, but for Chicago's mighty O'Hare International Airport, some recent clouds have cleared and a smooth ride seems assured to a high-flying future.

The airport, already the world's busiest, is undergoing a massive modernization and expansion aimed at guaranteeing its supremacy as the global leader in civilian flight operations for decades to come.

The $1.6 billion, 13-year program will nearly double the airport's passenger-handling capacity, add a major terminal, expand cargo- and baggage-handling facilities, and ease highway traffic congestion, which some days threatens mortal gridlock along the arteries linking O'Hare to America's heartland.

At the same time, the program does not call for adding runways to the complex. Such a move would trigger strong opposition from neighboring suburbs in the city's northwest, where complaints about airport noise and pollution already are high.

To combat the airport's congestion and pollution, one of the plan's major features is a 3.5-mile-long "people mover," an elevated, computer-run rail system linking the terminals with outlying parking lots and rental car agencies. Designed and primarily built by a French firm, the $138 million airport railroad is intended to shuttle up to 6,000 passengers an hour around the O'Hare complex when it is completed in about six years.

In all, the airport rebuilding effort encompasses no fewer than 100 separate major projects. It is billed as the largest public works project in Chicago history -- no mean boast for the brash prairie metropolis that rebuilt itself after burning to the ground in 1871.

Begun in 1982, the O'Hare development program has endured its share of political bickering over financing and rising costs. For the most part, these tensions reflect historic strains between the city and the rest of Illinois that crop up in every session of the state legislature like hardy prairie grass.

Recently, the maneuvering has intensified as the white ethnic politicians who inherited the remnants of the old Democratic organization of the late mayor Richard J. Daley try to impede the steadily strengthening power over patronage exercised by Harold Washington, Chicago's first black mayor. But Washington so far has brushed aside his opponents and seems increasingly in control.

As if underscoring this, Washington and the chief executives of the airport's biggest tenants, United Airlines and American Airlines, last week signed an unusual three-way agreement that nails down final financing for the people mover. At a news conference, Washington hailed the pact, which will cost the two airlines an extra $25 million total as their share of the bill, calling it a "centerpiece" of the entire airport-development program.

For all the chest-thumping and self-congratulations, the O'Hare reconstruction should mean good news for harried air travelers.

Opened in 1955, O'Hare was designed to handle 25 million passengers a year. They traveled in piston-engine DC-6s and the first jets, the Boeing 707 and DC-8.

The advent of wide-bodied jets and energetic fare-cutting spurred air travel to phenomenal growth. Last year, O'Hare handled 50 million passengers. From early morning to 10 o'clock at night, the terrazo concourses of O'Hare's three main terminals were thronged with travelers racing for connections or cabs. Delay, distress and dismay seemed as much part of the airport as its hot dogs. The place was busting out at the seams.

Expansion will raise O'Hare's passenger-handling capacity to 80 million annually by 1992, moving it far ahead of its current nearest competitor, Atlanta, which clocked nearly 43 million passengers through its gates in 1985.

According to official air travel figures, O'Hare's other major competitors rang up these totals for 1985:

Los Angeles, 37.6 million; Dallas-Fort Worth, 37.1 million; Heathrow (London), 31.2 million; John F. Kennedy (New York), 28.9 million; Newark (N.J.) 28.5 million; Denver, 28.5 million; and Haneda (Tokyo), 27.1 million.

Amid all this competition for patronage and airlines, O'Hare has unique strengths that derive from its location and its history. Situated at what for 150 years has been the major midcontinental transshipment point, with about 40 percent of the nation's 230 million citizens living within 500 miles, O'Hare attracts tens of thousands of short-haul regional travelers every month.

Unlike New York or Los Angeles, which must rely heavily on international traffic, O'Hare is a major connecting point for transcontinental routes as well. And, because it fits so well with the 1980s hub-and-spoke strategy of the airlines, O'Hare brings regional and intercontinental routes together in a way unmatched by other airports.

"You can get anywhere from anywhere via O'Hare," said one globe-trotting American the other day of his favorite airport. "I love it."

Although it remains under Federal Aviation Administration air-traffic controls that restrict landing and takeoffs at peak hours, O'Hare logs an average of one takeoff and landing per minute.

While there is no plan to alter these so-called "slot-control" limitations, United Airlines and American Airlines, the O'Hare giants, have earmarked more than $500 million between them for terminal expansion and modernization.

Fittingly, the world's busiest airport is home to the nation's biggest air carrier, United. The airline, which likes to describe itself to Chicagoans as their "hometown" line, accounted for 44 percent of all flight operations at the airport last year, according to data compiled by the Air Transport Association. American, which is locked in a stiff battle for revenue and profit with United, took another 31 percent of O'Hare operations, even though its own home base is Dallas-Fort Worth. Delta, the dominant force in Atlanta, was a distant third here last year, with just 4.7 percent of the operations.

American has scheduled $208 million in improvements by 1992 to its H and K concourses in Terminal 3, but United is spending far more -- $350 million -- in ways that should revolutionize the nature of its service here.

United has torn down the old Terminal 1, once the airport's international gateway, and will replace it with a two-part terminal consisting of a glass-walled ticketing pavilion with 14 gates, and a parallel "satellite" concourse of 28 gates. A broad, underground passageway of moving sidewalks will carry passengers from one concourse to the other in 2.5 minutes.

United says the double-concourse arrangement affords far greater flexibility than O'Hare's traditional Y-shaped concourses for handling the cumbersome wide-bodied, fuel-efficient jets of this era such as the Boeing 767. Designed by the Chicago architectural firm of Murphy-Jahn, which is known for such flamboyant post-modern buildings as the State of Illinois Center in the downtown Loop, United's new terminal promises to be an eye-grabber of glass and metal.

But the other important players here, such as Delta, Northwest, Republic, Continental, and the squadron of commuter lines and regional carriers, such as Mississippi Valley or Britt, also expect to participate in -- and benefit from -- the drive for speedier service and smoother operations.

With all the projects and plans, O'Hare International seems headed for new heights.