AAL's Crandall Warns Chicagoans Against Building Third Facility

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CHICAGO -- American Airlines chairman Robert Crandall warned a group of Chicago executives that building a third airport here, such as the one that Governor Jim Edgar has proposed for Peotone, Ill., would be just about the "worst thing" Chicago could do to travelers living here.

"If you want to weaken Chicago's position in aviation, build another airport," Crandall told the Economic Club of Chicago.

Another airport would "split" local traffic and take away American's incentive to offer the high-frequency services it now offers out of O'Hare and that is supported by connecting traffic, Crandall said.

Because such a large percentage of American seats out of Chicago are filled by connecting passengers, American will be able to accommodate any future growth in the local market without a new airport.

"We will just take the seats away from those connecting people and we'll connect them somewhere else," Crandall said.

Crandall indicated that American has no vested interest in whether the third airport is built.

"It doesn't make any difference to me," he said.

"I'll fly airplanes anywhere you want to fly. For your sake, I hope you do not."

Crandall also said American's alliance with British Airways and an expansion of its Tokyo rights are critical if Chicago is to continue enjoying its unique status as a two-hub town.

As the only city in the world where two airlines, American and United, operate large hubs, Chicago is in the "uniquely good" position of having two carriers compete for every passenger, Crandall said.

American needs the British Airways alliance, which will give it valuable access to other European points, in order to match the international shared-code services offered by its competitors, including United, which has marketing partnerships with Lufthansa and SAS, Crandall said.

"Without access to European markets beyond Heath-row, it will become even more difficult for us to compete for local business here in Chicago, since local customers -- logically enough -- are likely to choose the airline that can offer them the most products for all their trips."

An American-British Airways partnership would increase, not kill, airline competition across the Atlantic, Crandall said.

"The only way the AA-BA alliance can be approved is for the U.K. to accept an open- skies agreement, which will allow all U.S. carriers to fly to Heathrow from their U.S. hubs," he said.

"Since London is such a large local market, every one of them will do so, which will mean new service options for customers all over the U.S."

Crandall said the same logic applies in the Pacific, where American, Delta and Continental do not have the same access to Tokyo and markets beyond Tokyo that Northwest and United have, "which is why you can fly from Chicago to Tokyo and points beyond on United, but you can't get there on American."

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