SAN ANTONIO – An airline operating agreement and a series of terminal leases were approved Thursday by City Council, but Dallas-based Southwest Airlines said it is not in favor of the terms.
Chris Perry, a spokesperson from Southwest, told KSAT they disliked the newly passed items because their future commercial growth plans could be in jeopardy, adding they wouldn’t sign with the City of San Antonio if no changes were made.
All current lease agreements for all airlines at SAT expire on Sept. 30. Once an airline signs, they are locked for 10 years, with options to renew for an additional five years, according to Jesus Saenz, director of the airports for San Antonio.
Saenz said seven of eight airlines have signed an agreement with them, adding they have been trying to finalize with everyone for 24 months.
“We have finalized on a 10-year with a plus-five option. We’re basically stating our signatory carriers are interested in long-term commitments with the city of San Antonio and the airport,” Saenz said. “We’re ready to move forward on all of those conditions and move forward with all our carriers.”
Perry said the reason the airline didn’t see eye-to-eye was because they were promised by airport officials and the city that they would expand to 10 gates at the airport’s new Terminal C, which is set to open in 2028.
This move pushed the airline to agree to a $200 million placement for enhancements for the six gates they have in the airport’s Terminal A, which Perry said is an “insignificant amount for the number of enhancements needed.”
However, in June, Perry said the airport reserved their decision -- leaving them to question their future plans.
“For clarity’s sake, we haven’t stated we are considering leaving the airport, just that our future commercial growth plans could be in jeopardy and that we will not sign the deal in its current form,” Perry said in a statement to KSAT. “We have plans for future growth at SAT, but will be forced to reassess those plans without a concrete, viable option from the city to solve the capacity constraint problems.”
As of right now, Perry said that despite the dispute, they will continue to work with the airport on a solution.
Saenz spoke along the same lines of the airline’s willingness to work toward a solution, adding additional discussions were needed to reach an agreement.
“With any agreement, not everyone is going to walk away happy. It’s unfortunate that it’s happened this way, but we’re ready and equipped to have those conversations so we can try to make everyone happy as possible,” Saenz said.
Perry emphasized that “only one airline at SAT currently takes customers nonstop to twenty-two destinations without being funneled through a hub,” adding the airline has a 40% market share at the airport and carried more than 3.7 million customers in 2023.
“We will continue to work with the airport and the City on a concrete, viable option that solves the airport’s capacity constraint issues and doesn’t put its largest carrier in its smallest space, as well as provides the more than 3.7 million San Antonians who choose to fly Southwest annually the same experience as the elite travelers the airport is targeting with its gate allocations,” Perry said.
KSAT asked Saenz about the effects the airport would have if Southwest discontinued its relationship with them and he said at this time, “It’s unknown.”
“It is impactful, we understand the importance and severity of that impact,” Saenz said regarding the possibility of the airline leaving. “We don’t know what we know right now, but we’re going to continue to work with them in an effort to come to an amicable and reasonable solution.”