Midway, Chicago's "other" airport which is less sprawling than O'Hare International Airport, has been seeking ways to come up with a lease structure that is more financially viable.

"I am exploring all options on behalf of taxpayers, and I have made it clear I will only consider moving forward if certain conditions and criteria are met, including ownership remaining with taxpayers and a Travelers' Bill of Rights," Mayor Rahm Emanuel said in a statement.

Facing a December 31 deadline to keep the airport in a Federal Aviation Administration pilot program, Chicago plans to submit various documents, including a draft request for qualifications and a timetable to the agency.

A previous attempt to lease Midway to private investors fizzled in 2009 under former mayor Richard Daley as the economic downturn dried up financing for the $2.52 billion, 99-year deal.

The Emanuel administration said the airport lease would be for 40 years or less and would include a revenue-sharing provision, allowing the city to retain ownership of Midway and receive some money that would be earmarked for capital projects. Initial proceeds from a deal would be used to pay off the airport's outstanding bonds.

The city expects it will receive responses from qualified lease bidders in the first quarter of 2013.

The mayor also plans to create a blue-ribbon committee of members of the city council, along with business, labour and civic leaders to select an independent adviser to review the deal.

Chicago's approach for a lease deal won the support of Southwest Airlines Co (LUV.N), the airport's biggest carrier.

"Like the city, we want to better understand the market opportunity and the impact on our business and passengers," Gary Kelly, Southwest's CEO and president, said in a statement.

Chicago is trying to avoid the myriad of problems that popped up with a $1.157 billion, 75-year lease it entered in 2008 for its parking meters. That deal, which was slammed by the city's inspector general and some city council members for being undervalued, has resulted in much higher parking rates. The city has also been asked to reimburse the company that won the lease millions of dollars for out-of-service meters.

"We all know the parking meter deal was bad for taxpayers and the city, and I have instructed my staff to ensure we mandate significant changes that protect us from the mistakes made with the parking meter deal," Emanuel said. (Reporting by Karen Pierog; editing by Matthew Lewis)

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