The upstart and lower-fare Virgin Airlines’ plans to initiate service at O’Hare Airport, and thus bring competition, more jobs and economic development to the Chicago area, appears jeopardized by the sweetheart deal between the Daley administration and the legacy airlines that control the airport.

Which raises the question: When will someone, especially in the business community that is so dependent on air travel, finally get mad on the lunatic ways of O’Hare Airport.

Virgin Airlines, which provides international service from both coasts, has been planning a major expansion into America’s heartland, with O’Hare as its base. But it has been stymied because it has been unable to lease gates at the airport, even though more than enough are sitting idle. Virgin said it will have to decide in a few weeks whether to cancel its O’Hare plans and look for another alternative. Meaning, I assume, another Midwest city in which to locate its hub.

The reason Virgin can’t secure one of those empty gates? Because the gates are controlled by United and American airlines, which have a lock on some 80 percent of O’Hare’s business. And how can they get away with a duopoly at O’Hare when the airline industry is supposedly deregulated? Because the city and the airlines have a deal that makes it so: Chicago gets to charge the airline higher landing fees to support its favored contractors and featherbedding jobs at the airport and in return, the legacy airlines get favored treatment by gaining exclusive control of the airport’s gates. Incredibly, the deal to do so runs for another ten years. Unlike many other cities, airlines that aren’t using gates at O’Hare don’t have to give them up to other applicants.

This is an arrangement that works well for Daley’s Machine and the favored airlines, but not for airline passengers and the region’s economic base. The rest of us get to pay the price of greasing the skids for the “city that works.” Here we have just one more challenge to the conventional wisdom that a little graft and favoritism is necessary to keep the city running.

Virgin and city officials say they are trying “to broker a deal” that would allow the airline to establish a foothold here, as if that should be a difficult chore when so many gates are available and the economy is in a downturn. We aren’t told what that “deal” would entail, but it would certainly involve getting the legacy airlines to rent some of their treasured space to Virgin. What that would cost, and what they would get from the city and Virgin, who knows?

The irony is that the Federal Aviation Administration, which has placed a cap on airline traffic at O’Hare because of its horrendous on-time performance, has granted “slots” to Virgin. But without terminal gates to load and unload passengers, luggage and cargo, the FAA’s permission to use O’Hare is meaningless.

Another irony is Daley’s celebration of a new O’Hare runway, which, as part of a grotesquely large, impractical, costly and dangerous airport expansion, is supposed to increase the airport’s capacity. Never mind that the FAA finally acknowledged what expansion critics long maintained: the new runway will do little if anything to expand capacity. At best, it will shorten (but not eliminate) the airport’s notorious delays.

Opponents of the $14-billion-plus O’Hare expansion have long asserted that the gate leasing and other sweetheart deals worked out with the airlines to protect the Daley Machine’s largest source of jobs and contract patronage has been a drag on the region’s economy. Moreover it is a disservice to flyers who could benefit from greater competition that would bring lower fares and better service.

The most effective alternative, the critics have steadfastly maintained, is the competition that a major, privately funded south suburban airport would bring to the region. Everyone agreed as long ago as the 1980s that the third airport was the best solution, but Daley, early in his long-running term used his substantial political influence to block the third airport. Virgin and other low-cost airlines could be serving the Chicago region today if it were not for Daley’s determination to protect the status quo.

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Dennis Byrne is a member of the Chicago Daily Observer’s editorial board and a former consultant to O’Hare expansion opponents.