UPDATE, March 15 — American Airlines has dropped its opposition to O'Hare Airport's $8.5 billion expansion after reaching a deal with Chicago Mayor Rahm Emanuel, the Chicago Tribune reported. In exchange for American's cooperation, the city will speed up construction of three new gates that the airline will use in the future, though it remains unclear when those gates will be built. The agreement, reached Wednesday night, comes as the Chicago City Council on Thursday begins to consider Emanuel's eight-year overhaul plan for the airport.

Dive Brief:

• American Airlines is threatening to sue the city of Chicago and reduce its service into O'Hare International Airport, claiming that the city cut a deal with United Airlines, giving the latter five additional gates as part of the airport's $8.5 billion planned expansion, according to Chicago Sun-Times
• American said it was cut out of the negotiations that denied it three gates and that it will not sign on to the expansion deal. City officials and United deny the claims. American has launched a website with the intention of rallying employees and customers alleging that five more gates for United mean reduced competition and higher fares.
• Mayor Rahm Emanuel's office is pushing for the Chicago City Council's aviation committee to approve the expansion plans and give its authorization to borrow $4 billion to get the project started. City officials said there is no additional risk for the city if American doesn't sign on to the deal, and, in fact, it would not be in the best interest for American not to become a signatory because then the airline would have no say in O'Hare operations.

Dive Insight:

At the end of last month, Emanuel announced that the expansion deal was close to being finalized, and the Chicago Tribune reported that Emanuel was leveraging the fact that airline leases were about to expire to speed the process along. City officials plan on borrowing against the negotiated higher fees and airline charges to pay for construction.

The addition will take approximately eight years and will see the demolition of an older terminal, which will be replaced by a "Global Terminal" that will be able to accommodate large, international aircraft.

The new terminal will connect to two new satellite concourses by an underground pedestrian tunnel. The plan also includes the renovation of three existing terminals, 25% more parking space for planes, 35 new gates and the replacement of 40 current gates. The expansion will increase O'Hare's space by 3 million square feet.

O'Hare already has another major construction project going on already — the airport's sixth runway. At the time of the groundbreaking, officials said the $649 million project was like adding the capacity of a third airport. The new runway will be complete in 2020 and will generate about 6,000 jobs.