SAN ANTONIO – San Antonio’s largest airline has sued the city in an attempt to block a new airline lease agreement that would shut it out of a new $1.4 billion terminal.
Southwest Airlines filed a lawsuit Thursday in the U.S. District Court against the city and San Antonio Director of Airports Jesus Saenz.
The Dallas-based airline claims the city pulled a “bait and switch.” Despite what the airline said were multiple verbal commitments from Saenz that Southwest would get space in the new Terminal C that’s under development, a new airline use and lease agreement (AULA) would put Southwest’s 10 gates in the older and smaller Terminal A, instead.
The airline also claims the city used “unlawful,” subjective selection criteria in choosing which airlines got a spot in the coveted new terminal, such as international routes and airline lounges.
Eight other airlines have already committed to the new AULA, according to the city, and the city council approved it two weeks ago. It’s supposed to take effect Oct. 1 and would last for 10 years, with an option to extend the agreement a further five years.
If Southwest does not sign, it would pay higher rates than the signatory airlines. However, the airline has asked the federal judge to block the lease from going into effect.
The airline has not threatened to leave San Antonio over the fight, but City Manager Erik Walsh indicated the lawsuit could mean no airlines get a spot in Terminal C.
“The airline agreement is the foundation of our Terminal Development Program, and Southwest’s actions could have the effect of halting our progress and keeping the airport the way it is,” Walsh said in a statement Friday.
Southwest Airlines has taken a more optimistic tone. In a statement Friday morning, Southwest spokesman Chris Perry said the airline filed its lawsuit “to preserve our legal rights” prior to the lease taking effect Oct. 1.
“We are encouraged by recent conversations with City leaders and look forward to reaching an expeditious and realistic solution,” Perry said.
‘Back to square one’
This lawsuit came after a Tuesday meeting in Dallas between a city delegation of City Manager Erik Walsh and Mayor Ron Nirenberg and Southwest CEO Bob Jordan, COO Andrew Watterson and the airline’s legal counsel.
In a Wednesday memo, Walsh told council members the airline threatened to pursue legal action against the city if they didn’t delay the deadline for the execution of the new airport leasing agreement.
“Barring an assurance from the City that the improvements (to Terminal A) would be funded no matter the cost, they urged the City to delay execution of the new agreement,” he wrote.
However, the city flatly refused and said it would delay the construction of the new terminal and send negotiations between them and other airlines to “square one,” which could essentially give more power to Southwest, according to Walsh’s memo.
Under the AULA, $200 million is allocated for renovating Terminal A, though Southwest is worried it is not enough.
Though Walsh said Southwest had chaired the committee that signed off on that amount of money, the airline wrote in its lawsuit that it had not focused on what would happen with the terminal since it had expected to be moving its operations to Terminal C.
“Had Southwest been timely informed that Defendants were not actually planning to offer Terminal C to Southwest, the airline would have adopted a different bargaining position and would not have assumed that it was not remaining in Terminal A,” the lawsuit states.
During Tuesday’s meeting with Southwest, the city offered to add another $100 million for renovations — half of which would be funded entirely by the airport, but Southwest declined.
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