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Chicago's O'Hare Airport is looking to use passenger facility charge revenue to help plug a funding shortfall in its expansion plan after airlines objected to issuing more general airport revenue bonds, a city official said on Wednesday.A committee of airlines at O'Hare in October turned down a request to issue USD$500 million of the bonds, said the official, who asked to not be named.

Instead, the airport has published a notice that it plans to ask the Federal Aviation Administration for permission to tap USD$270 million in passenger charge revenue to reimburse itself for land acquisition and building demolition, according to the FAA.

The airport plans to formally submit a request next month, the city official said, adding that the money from the USD$4.50 per enplaned passenger charge would be used as cash and would not back any bonds.

In October, city aviation officials said the initial nearly USD$2.9 billion phase of the project had grown by about USD$400 million due to litigation and construction delays. The plan at the time was to fill the gap with the same financing sources slated for the entire project -- general airport revenue bonds (GARBs), passenger facility charges and federal airport improvement funds.

But issuing the GARBs proved to be a sore point with airlines.

«Since 2003, and particularly since the latest cost overruns were announced, we have continued to work with the city to find ways to complete the project on time and within budget,» Mary Frances Fagan, spokeswoman for American Airlines said on Wednesday. «Until we and the city have thoroughly explored all ways to bring the project within budget, we think it's premature to issue more GARBs to fund overruns. We want phase 1 built on budget.»

Megan McCarthy, a spokeswoman for United Airlines declined to address the bond matter, but said the airline was reviewing the airport's passenger facility charge request.

«We're continuing to work with the O'Hare Modernization Program with the hope we can successfully complete the project,» she said.

Chicago still has pending with the FAA a request filed in August to use USD$1.2 billion from the passenger charges for the expansion project, excluding land acquisition, the FAA said.

The FAA gave final approval to the project, which was expected to cost USD$7.5 billion, in September 2005 and committed USD$337 million of federal funding that November. The project, which adds, relocates and extends runways among other improvements, was aimed at taming flight delays at O'Hare that ripple through the US air traffic system.

Other projects that were not part of the FAA's approval and that some say are necessary for the O'Hare plan to work would push the price tag up to nearly USD$14.3 billion, according to FAA documents.

Bensenville and Elk Grove village, suburbs that stand to lose land to the airport expansion, along with a cemetery in the path of the expansion, have been fighting the project in court.

«It's time for the city of Chicago to wake up to the reality that the current proposal costs too much and won't deliver any of the promised benefits,» John Geils, Bensenville's village president, said in a statement on Wednesday. «The airlines' decision makes our court challenge to federal funding for this plan stronger than ever.»