Airlines operating at Chicago's O'Hare International Airport have agreed to cut flights to reduce delays that ripple across the country, sources familiar with the talks said yesterday.
The agreements came after two weeks of negotiations with the government, which had warned carriers this month that it would impose a reduced flight schedule at O'Hare if the airlines did not cut flights themselves.
Transportation Secretary Norman Y. Mineta and Federal Aviation Administrator Marion C. Blakey were to fly to O'Hare as soon as today to announce the agreement, according to government and aviation sources who were not allowed to speak publicly about the issue.
"We're optimistic we will have something to share very soon," Transportation Department spokesman Robert Johnson said yesterday. "This is all going according to plan. A voluntary agreement has always been our goal."
Details on the cuts for each carrier were unclear yesterday, but American and United airlines, which together operate 88 percent of the flights at O'Hare, were expected to cut far more flights than other operators. Each carrier negotiated individually with the FAA, and none was told of others' voluntary cuts, the sources said.
The O'Hare negotiations provided a glimpse of just how cutthroat the airline industry has become as financially struggling hub carriers struggle to fend off rapidly growing low-fare airlines that are driving ticket prices down.
In public filings with the FAA, AMR Corp.'s American and UAL Corp.'s United expressed concern that cutting flights at Chicago, a city where both carriers operate hubs crucial to their operations, would harm their already fragile financial situations. Low-fare airlines argued that they couldn't reduce many flights because they operate only a few to begin with, and eliminating them would effectively remove competition and result in higher fares.
"The focus of this exercise should properly be on American and United," said Flyi Inc.'s Independence Air in its filing with the FAA. "It is these two carriers that have created the problem."
United Airlines retorted that it and American already have agreed to voluntarily cut flights twice at O'Hare, only to see other carriers fill in the gaps. Cutting flights further could wreak "substantial" economic damage on the airline, United said in its filing. "Further substantial schedule changes, even if voluntary, would force United to turn away an increasing number of passengers -- an opportunity cost that United can scarcely afford to incur," its filing stated.
Record-level congestion and delays this year prompted the FAA to use its new authority to ask carriers with operations at O'Hare to meet Aug. 4 at the FAA's headquarters in Washington and offer voluntary flight cuts during peak hours. After two days of face-to-face meetings with each carrier, the FAA continued negotiations by phone last week.
The FAA asked carriers to cut flights overall by about 5 percent during peak hours beginning in November, when the airlines begin flying a new fall schedule. During the talks, however, the FAA showed a willingness to consider a slightly smaller cut in flights from the level it had originally proposed, said government and aviation sources.
One out of every three flights arriving at O'Hare is delayed, according to Department of Transportation figures, and 36.6 percent of all delayed flights keep passengers waiting for more than an hour.
The negotiations have proved to be tricky because Justice Department antitrust laws required individual negotiations with each carrier. Airlines were not allowed to discuss flight cuts with one another, and they could not offer flight cuts based on another airline's offer. In their separate public filings, American and United suggested that they be allowed to swap or sell slots to another airline at O'Hare.
Transportation spokesman Johnson declined to comment on whether that would be allowed.