CHICAGO – Chicago officially withdrew its application to privatize Midway International Airport in a letter to Federal Aviation Administration Friday.

The move probably will open up the single slot reserved for a hub airport under the 1996 Airport Privatization Pilot Program that allows up to 10 airports to be privately operated. If the city decided to pursue a lease sometime in the future, it would need to reapply for the hub slot. The FAA did not have an immediate comment.

Chicago Mayor Rahm Emanuel  pulled the plug on privatization plans for Midway after one of only two remaining bidders dropped out, raising concerns that the lack of competition might erode the deal’s value.

In a letter Friday addressed to Randall Fiertz, director of the FAA’s Office of Airport Compliance and Management Analysis, Chicago’s chief financial officer Lois Scott formally withdrew the city’s revised application submitted in January.

“As you know, the city of Chicago set high standards in exploring a potential leasing of Midway Airport that would ensure taxpayers and our airport stakeholders – including the airlines, passengers, and workers -- received a fair and equitable deal,” Scott writes. “At this time, we do not believe these conditions will be met.”

The city thanked the FAA for its assistance as officials “evaluated this potential transaction.”

The city first reserved the slot in the fall of 2006. Former Mayor Richard Daley had struck a $2.5 billion, 99-year deal in 2008, but the winning bidder couldn’t raise the financing after the credit markets tightened following the 2008 financial crisis. The deal was cancelled in 2009. Daley and then Emanuel continued to reserve the spot but faced a Dec. 31, 2012, deadline to decide whether to again pursue a lease or free up the hub position.

The 1996 program allows airports to enter into long-term operating leases or pursue the sale of a facility to a private firm. The program exempts the airports from laws that require airport revenues to be spent on airports. Congress established the program as a means to generate access to various sources of private capital for airport improvement and development. The 2012 Reauthorization Act increased the number of airports than can participate from five to 10.

As of August 2013, the FAA reported three active applications in the program, Midway, Luís Muñoz Marín International Airport which closed on a lease earlier this year, and the Hendry County Airglades Airport.

Chicago paid $3.5 million in fees and expenses to lawyers and other advisors on its aborted plan to privatize Midway.

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