CHICAGO — The Federal Aviation Administration on Thursday granted Chicago’s request to preserve its ability to pursue a privatization of Midway Airport under a federal pilot program until the end of the year.

In a late March letter to the FAA, Chicago chief financial officer Lois Scott requested an extension to let the city keep the hub slot under the program until Dec. 31.

Chicago struck a $2.5 billion deal to lease Midway Airport to a private investment group in 2008, but it fell apart in 2009 when the consortium couldn’t raise financing due to the international credit crunch.

With strong interest in a proposed privatization of Luis Muñoz Marin International Airport in Puerto Rico, market participants believe the city could pull off a new lease deal.

Mayor Rahm Emanuel has treaded cautiously on the issue due to political and public opposition to future asset leases, previously saying he wasn’t interested in resurrecting the deal. However, he wants to spend billions on infrastructure and the city faces mounting pension obligations. Under an Illinois state law, proceeds of the deal were mostly restricted to those two areas.

In granting the city’s request, the FAA wrote in a letter Thursday that Chicago must include information on a privatization timetable and other updated information in its application by the end of year deadline. If not submitted, “the FAA will consider the city’s application to be officially withdrawn” and “will remove MDW from the airport privatization program slot,” the letter reads.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.