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Discussions between Southwest Airlines and the City of San Antonio over use of the new airport terminal reached another stalemate this week when the airline sued the city, alleging discrimination against the low-cost carrier.
According to a lawsuit filed Thursday, which names the city’s Director of Airports Jesus Saenz, the airline says the city “unlawfully and unfairly applied subjective criteria” to bar Southwest from the new terminal because its passenger “profile” was deemed an inappropriate fit for the new accommodations.
Last week, Southwest declined to join other major airlines in signing a new lease and use agreement that goes into effect on Oct. 1 unless the airline gets the 10 gates it wants in the $1.4 billion new concourse or assurances that the city will commit more funds to upgrading Terminal A.
Airport planners working for the city had proposed turning the San Antonio International Airport’s Terminal A into a dedicated Southwest terminal, reducing the number of gates by seven in order to expand waiting areas and concessions. They had promised to spend $200 million on upgrades.
Other airlines, American and Delta, were assigned to the new $1.4 billion terminal, while United would remain in Terminal B.
City Manager Erik Walsh addressed the lawsuit on Friday, saying it could throw a wrench in the city’s overall massive airport redevelopment project. “Southwest’s actions could have the effect of halting our progress and keeping the airport the way it is,” he said in a statement.
Southwest vice president, general counsel and corporate secretary Jeff Novota said in a letter to Saenz that the airline, which accounts for 37% of SAT traffic, is being discriminated against.
Southwest makes that allegation based on Department of Transportation grant-making rules which mandate that airports be made available for public use “without unjust discrimination to all types, kinds and classes of aeronautical activities.”
Novota said in the letter shared with the Report that the City of San Antonio, as owner and operator of the airport, is “not free to use subjective criteria to choose one airline over another based on the desire of the municipal government decision-makers.”
He added that airports are “not legally entitled to pick ‘winners and losers’ among the airlines that choose to serve the airport.”
Novota also took issue with making gate and terminal assignments based on whether an airline was a good fit for San Antonio or if it has an airline club as part of its offerings, which would be a violation of the Airline Deregulation Act.
Southwest contends that Terminal A is too narrow and won’t provide the customer experience it expects. “To date, the City has not provided a viable plan that would address these Customer experience issues or rectify the impact to our long-term commercial plan by requiring Southwest to remain in the old Terminal A,” Novota stated in the letter.
Despite the threat of litigation, city leaders traveled to Dallas on Tuesday to meet with Southwest executives and offered a compromise to close the deal.
Concessions offered by the city included increasing the Terminal A renovation budget from $200 million to $300 million, with half the expenditure subject to the approval process outlined in the agreement which requires all airlines to agree. The other half would be funded entirely by the San Antonio airport.
The olive branch was delivered with an artist’s rendering of what Terminal A could look like as a dedicated Southwest concourse.
“We made a substantial offer — within the framework of the lease agreement — to address their concerns, and we look forward to continued discussions,” Walsh said earlier this week.
In a memo to Mayor Ron Nirenberg and City Council members on Wednesday, Walsh said that Southwest “accepts” that the decision to keep the airline in Terminal A is final, but that the airline’s executives won’t sign the agreement until they know that the budget approved for renovation is sufficient.
Walsh said if the city were to agree to Southwest’s request, and not execute the agreement in the coming week, it would delay construction of the new terminal and push negotiations over the agreement that other airlines have signed “back to square one.”
Andrea Drusch contributed to this report.
