Southwest Airlines and San Antonio Head to Court After Settlement Talks Collapse
Jan. 15—The city and Southwest Airlines could have put an end to a costly legal battle in settlement talks last month, but they didn't — they're still fighting over gate assignments at San Antonio International Airport.
The two sides told a federal judge this week that they want to continue their brawl in court. They're asking for a late-April trial date.
Southwest sued the city and Airport Director Jesus Saenz in September over new long-term use and lease contracts that shut the Dallas-based carrier out of the planned, $1.7 billion Terminal C. Under the new agreements, Southwest would be the sole airline operating out of Terminal A, the airport's oldest facility, when the new terminal opens in 2028.
Southwest claims Saenz promised the airline space in Terminal C, and then reneged. The company also alleges the criteria the city used to determine which airlines would get gates in the new terminal were unlawful.
The city denies those allegations.
Southwest and San Antonio officials hit pause on the legal fight and went to a settlement meeting sponsored by the Federal Aviation Administration the week of Dec. 16.
"Unfortunately, no FAA-facilitated settlement was achieved, and the parties have conferred with regard to the revised schedule for the continued litigation of this matter," the parties said in a joint statement to the court on Tuesday.
Assistant City Manager Jeff Coyle said Wednesday that the city made a good faith effort to resolve the disagreement but that "Southwest was completely unrealistic."
Southwest spokesman Chris Perry said a court ruling in the airline's favor could force the city to re-negotiate gate allocations.
"We believe the City's gate-allocation methodology discriminated against Southwest," Perry told the Express-News on Wednesday. "With the City unwilling to compromise despite our good-faith negotiations, we will continue to seek relief in court."
In addition to its lawsuit, Southwest in September sought a temporary restraining order to block the new lease agreements from taking effect. But U.S. District Judge Xavier Rodriguez ruled against the airline, saying he didn't believe Southwest would suffer irreparable harm if the lease went into effect.
He also said he the matter boiled down to a business dispute the parties should resolve themselves.
"I feel like I'm being used as a pawn in negotiations," Rodriguez said at the time. "You all should continue to talk, but I'm not going to be your mediator for this fight."
The long-term lease agreement went into effect in October. Southwest said it wouldn't sign the long-term leases, guaranteeing that the airline will pay higher fees for operating on a month-to-month basis.
Southwest is the dominant airline in the city, carrying nearly 40% of San Antonio International Airport's passengers. Southwest has said its plans to increase its market share to 50% are in jeopardy now that the company has been denied space in the new, larger terminal.
Eight airlines signed the new use and lease agreements, which last a decade and has a five-year renewal options.
The agreement sets aside $200 million for renovations in Terminal A, which could be used for a variety of changes, including cutting the number of gates from 17 to 10 to create larger waiting areas and reduce crowding in the terminal's narrow concourse. The improvements also could include upgraded restrooms and ticket counters.
Southwest has said is not enough to relieve the overcrowding often chokes the facility's 75-foot wide concourse, which is one of the narrowest among major U.S. airports.
Before Southwest filed the lawsuit, San Antonio offered the airline another $100 million for upgrades to Terminal A during a September meeting at the airline's Dallas headquarters, for a total of $300 million for improvements. Southwest CEO Robert Jordan and COO Andrew Watterson participated in the meeting, and Mayor Ron Nirenberg, City Manager Erik Walsh and Saenz led the city delegation.
Southwest leaders turned down the city's offer, which City Attorney Andy Segovia said will remain off the table as long as Southwest continues pressing its lawsuit.
Coyle, the assistant city manager, said Wednesday that Southwest wanted even more during the December talks.
"In addition to a larger renovation budget for Terminal A, they wanted $150 million in cash payments from the airport," Coyle said.
In an interview in September, Watterson said he wanted engineering and architectural studies to be conducted to identify the renovations Southwest would need, as well as their cost.
___
