A new decade-long lease agreement is expected to go into effect Oct. 1. Southwest is trying to stop that from happening.

SAN ANTONIO — Southwest Airlines is escalating its impasse with San Antonio over what it calls “fundamentally flawed” airport terminal allocations, accusing the city and its aviation head of discriminating against the company in a lawsuit filed Thursday.

The standoff is centered on the forthcoming Terminal C at San Antonio International (SAT), which will be more than twice as big as the two existing terminals combined, and the airlines that will fly out of there as part of a new lease agreement going into effect in just days. Southwest, which says it carries more travelers than any other U.S. airline, has said San Antonio aviation officials repeatedly promised the airline that all or most of its 10 gates at SAT would move to Terminal C. 

That changed in May, when the city, in what Southwest called an “unlawful bait and switch,” instead said the airline would remain in Terminal A. Now the airline’s future at SAT could be grounded after it said in the lawsuit that it has “no realistic option” but to decline signing the new lease that goes into effect Tuesday. 

It’s seeking the approval of a temporary restraining order to prevent seven other airlines from entering into the lease with the city. 

“Southwest Airlines values its relationship with San Antonio and remains hopeful that the airline and the City can agree on a plan that accommodates our future growth and treats us equal to the other carriers,” Southwest spokesperson Chris Perry said in a statement. “We took this action to preserve our legal rights prior to the new lease agreement taking effect on Tuesday, Oct. 1. We are encouraged by recent conversations with City leaders and look forward to reaching an expeditious and realistic solution.”

City officials, however, appear to believe Southwest won’t leave SAT regardless of whether it signs the new lease agreement or not. 

A memo sent by City Manager Erik Walsh to City Council members and Mayor Ron Nirenberg on Wednesday said that “Southwest executives reiterated that they have no intention of leaving San Antonio.” According to Walsh’s memo, a contingent of city leaders including Nirenberg, Aviation Director Jesus Saenz and City Attorney Andy Segovia went to Dallas this week to meet with Southwest in an effort to find common ground. 

The memo says the city tried to entice Southwest by explaining that Terminal A is set to receive $200 million in upgrades, with the potential for more. But the airline decided to continue its holdout until it could receive assurances that the terminal would receive enough of a facelift to meet its estimated levels of service. 

If Southwest doesn’t sign the new least by Tuesday, it will be deemed a “non-signatory airline” and could have to pay more in rent fees to the city. 

>Read the full lawsuit below:


According to the lawsuit, the airline warned San Antonio multiple times over the summer that Terminal A was “not sufficient to support Southwest’s passenger volume or operational needs.” 

Further, Southwest accused San Antonio of violating the Airline Deregulation Act by illegally considering factors like service and airline routes when it allocated terminal space. Southwest said San Antonio unjustly prioritized airlines offering premium service and lounges, which Southwest said it didn’t. 

“Airports may not give better terminal space because of a subjective belief that the favored carrier is a better ‘fit’ with the community,” Southwest’s vice president told San Antonio Aviation Director Jesus Saenz in a letter last week, urging the city to take action by Wednesday of this week. 

Southwest said the city was discriminating against the airline by causing “significant harm to Southwest’s competitive position,” adding that staying in the smaller Terminal A would needlessly complicate the airline’s operations while burdening travelers. 

“Airports are not legally entitles to pick winners and losers among the airlines that choose to serve the airport,” the lawsuit says. “Yet that is precisely what the city has done in this case.” 

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