There’s no ‘luv’ lately between Southwest Airlines and the San Antonio International Airport.
A standoff between the Texas-born carrier and airport officials in the Alamo city is brewing. Southwest executives say the airline got the short end of the stick in plans for a new terminal at SAT. Now they’re threatening not to renew their long-term contract at the airport.
Depending on how it plays out, the turbulence between the two entities could end up affecting travel plans for passengers down the line.
Megan Rodriguez, city hall reporter for the San Antonio Express-News, has been following the dispute and joined the Standard to talk about what’s at stake. Listen to the interview above or read the transcript below.
This transcript has been edited lightly for clarity:
Texas Standard: Well, at the core of the issue is the plan to expand San Antonio’s airport, and that includes a new terminal. That sounds great. Tell us a little bit about the upgrade and a timeline for completion.
Megan Rodriguez: Absolutely. So the San Antonio International Airport has a 20-year expansion plan that it’s working on. They estimate that whole expansion plan, which is inclusive of a lot, would be about $3.5 billion.
But the biggest item that I feel like people tend to talk about, especially since it’s happening right now in the near term, is the creation of a new 17-gate terminal that’s set to open in 2028. It’s one of the costliest parts of the effort at an estimated price tag of about $1.68 billion right now.
It would include a new mezzanine level, more concessions, restrooms. It would be closer to a new U.S. customs processing center. It would have six gates for international carriers specifically.
But yeah, the kind of point of contention between Southwest Airlines and the airport is all about the gate assignments at that new terminal. Southwest feels like it was left out. They thought that they were going to get gates, and the airport says “we never made that promise.”
So explain a little more why Southwest is unhappy when it comes to the new terminal at San Antonio International Airport. What is at the heart of the disagreement?
So Southwest Airlines has historically and is currently in Terminal A, which is one of two existing terminals on the San Antonio International Airport grounds. And it’s the oldest one. They currently have 17 gates in terminal. A lot of those go into Southwest Airlines.
The airport is saying, “well, under this new agreement, you could basically be the only airline in that terminal. We would be willing to kind of drop down the number of gates to reduce the cramping of that area because it’s kind of known as a really tight space.” It gets crowded pretty easily with the 17 gates in that terminal currently existent.
And also, it’s only got a 75-foot wide concourse, which is really a big part of what the Southwest Airlines executives have an issue with. They say that they prefer the 120-foot wide concourse that’s over at the new terminal and just a lot of the other amenities and things that would be kind of coming with it.
Southwest Airlines is saying that as the carrier that currently has about 40% of the domestic flights in and out of San Antonio International Airport – they had been wanting to expand and grow to about 50% – but they say that without that bigger space, they’re just not going to be able to do it. Even though the airport is saying, “well, we’re willing to help you all expand by doing some renovations there,” the long term lease agreement actually includes some money that’s kind of set aside for Terminal A. It would be about $200 million.
But even though Southwest Airlines isn’t putting an exact price tag on what they think would be a more appropriate amount, they’re saying $200 million isn’t going to cut it.
Yeah, I know that terminal. Well, I’m sure lots of Texans do. Has Southwest indicated what the airline plans to do? Is there any chance that they will pull out of the airport or is there some sort of compromise in the works?
Mayor Ron Nirenberg’s city manager, Erik Walsh, and airport director Jesus Saenz are trying to hammer out an agreement between Southwest and the airport. It’s not really clear what kind of agreement that would be or when something would kind of come to fruition.
The Southwest Airlines COO, Andrew Watterson, actually told me last week that he would understand if it took months to complete some kind of negotiations to get everybody on the same page. So it’s unclear exactly how long this this discussion could kind of go forward.
But Southwest Airlines has said they don’t want to pull out completely from San Antonio. It’s a big market for them. And they don’t really want to leave entirely. But they’re saying basically it could impact their growth. And in the long term, if they keep having these arguments – even though, right now, it’s not something that they would want to pull out of – eventually those costs will add up.
So the San Antonio International Airport, if you don’t sign a long term lease agreement with them, you basically incur higher fees. You lose out on revenue sharing that other airlines that sign on get to enjoy. And so, for example, in the first year that the Southwest Airlines would basically opt out of signing on and be on this kind of a month to month agreement, instead they would be incurring an additional $6 million in fees and $4 million of lost revenue sharing.
So it would have an impact and could eventually have an impact on how many flights Southwest Airlines plans to offer in the future. But it’s still looking like that could be a little bit before we kind of see some of those impacts come to fruition.
Well, you touched on a little bit, but how could this potentially affect people flying to and from San Antonio? I understand Southwest has been a big presence at that airport and has been flying out of the city itself for more than 50 years.
Yeah, there are some really deep routes with San Antonio International Airport and Southwest Airlines for sure. And I think as far as travelers go right now, nobody, I don’t think, will notice an immediate difference.
But it could eventually be something that we may not see additional flights or routes kind of coming up because Southwest Airlines is in this long term debate or we may not see Southwest Airlines wanting to expand and grow their footprint.
And so it really is kind of yet to be seen exactly how travelers will be impacted. Nothing in the near term, is what it looks like. But over the long haul, I do think that we will eventually be seeing some kind of adjustment. And it’s just kind of a wait-and-see of how that will shake out.
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