‘Extreme case of sour grapes’: San Antonio & Southwest Airlines head to court

City of San Antonio and Largest Airline Battle Over New Lease

In a dispute reminiscent of a bitter battle between rival sports teams, the City of San Antonio is preparing to lock horns with Southwest Airlines over a contentious new airline use and lease agreement (AULA). The city and the airline are set to appear in court Monday at 1:30 p.m. in the U.S. District Court for the Western District of Texas in San Antonio.

Southwest Airlines Allegations

Southwest Airlines, the largest airline operating in San Antonio, has accused the city of employing “bait and switch” tactics during the negotiations of the AULA. This conflict revolves around the distribution of space in the yet-to-be completed Terminal C at San Antonio International Airport.

In its lawsuit, Southwest alleges that Jesus Saenz, Airports Director, verbally committed to allocating the majority of Terminal C, if not all, to the airline. Contrary to this, the city relegated Southwest to the older, smaller Terminal A, leaving the airlines frustrated and calling foul.

Details of the Dispute

Southwest’s suit further contends that the city misused selection criteria, such as routes and airline lounges, to decide which carriers would occupy the coveted gates in the new terminal. The airline has requested the federal judge in San Antonio to issue a temporary restraining order to halt the AULA from taking effect on Tuesday. Such a move would consign all 10 Southwest gates to Terminal A.

City of San Antonio’s Response

In a response filed on Monday morning, the City of San Antonio dubbed Southwest’s lawsuit as “an extreme case of sour grapes”. The city argued that blocking the AULA would do more harm to the city than allowing the lease to take effect and impacting Southwest.

Furthermore, the city noted that if the new AULA fails to take effect, San Antonio would lose approximately $1.2 million per month based on the difference in rates. Without the AULA, the city warned, the $1.4 billion program to construct Terminal C would also face delays. The project completion is currently slated for 2028.

City Denies Allegations

San Antonio City has discounted Southwest’s claims about using inappropriate factors to decide which airlines obtained spaces in Terminal C. The city maintains that allocating space efficiently among multiple tenants in a city-owned airport is a fundamental prerogative.

The city responded to Southwest’s ‘bait and switch’ allegations as ‘false and irrelevant’. While the city openly denied making any such promises, it didn’t explicitly deny any assurances made during negotiations. Southwest’s fate will now hinge on the court’s decision in this high-stakes business dispute.