A Southwest Airlines plane departs San Antonio International airport in August 2025.
Robin Jerstad
Passengers check in at the Southwest Airlines counter at the San Antonio International Airport in August 2025.
Robin Jerstad
A Southwest Airlines plane is sits behind the construction work for the new San Antonio International Airport’s Terminal C in August 2025. Southwest and the San Antonio officials are meeting in federal court Tuesday in a legal battle over gate assignments in the under-construction, $1.7 billion Terminal C.
Robin Jerstad
A plane takes off at Austin-Bergstrom International Airport on Friday, Feb. 28, 2025.
Mikala Compton/American-Statesman
Southwest Airlines workers showered Bob Jordan with applause in December as he unveiled plans for a massive expansion at Austin-Bergstrom International Airport.
Flanked by Gov. Greg Abbott and Austin Mayor Kirk Watson, Southwest’s CEO told the crowd of employees and reporters that the airline would open a new crew base and flight attendant training facility at the airport.
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The Dallas carrier will add more than 2,000 jobs in Austin, tripling its local workforce, and increase the number of flights out of the Texas capital. The new facilities opened this week.
Southwest, the anchor tenant in a terminal that’s under construction at the Austin airport, will receive $19.5 million in state and city subsidies for the expansion.
“It just underscores the importance that Austin has in the state of Texas and Southwest Airlines as we continue to grow our franchise,” Jordan said during the announcement at the Austin airport.
The celebration was a stark contrast to the frosty interactions between Southwest and San Antonio city officials over the last year and a half. They’re in federal court fighting over gate assignments at San Antonio International Airport.
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Southwest sued in late September 2024, claiming Airport Director Jesus Saenz told the airline it would have gates in the $1.7 billion Terminal C, which is under construction and expected to open in 2028, but then reneged on the verbal agreement. City officials say there was no such deal.
Terminal C is the cornerstone of a 20-year master plan to overhaul the airport amid booming growth projections and growing local demand for air travel.
Instead of letting Southwest have gates in the flashy new terminal, airport officials want to make the airline the sole tenant of Terminal A, which opened in 1984 and has one of the narrowest concourses among large U.S. airports.
An operating and lease agreement with airlines at the San Antonio airport, approved by City Council on Sept. 12, 2024, included $200 million for Terminal A upgrades. City officials sweetened the pot, offering another $100 million — but no deal. Southwest sued anyway.
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A federal judge sided with the city in August, dismissing the case, but Southwest appealed that decision.
The airline and the city could be close to making amends. They’ve been in settlement negotiations since at least January, according to court documents.
Neither party would comment on the status of the case.
But even if the carrier and local airport make up, their brawl and Southwest’s flourishing relationship with Austin raise big questions. What are Southwest’s plans for San Antonio, where it’s the largest airline? Will the carrier’s investment in Austin ultimately hurt the Alamo City? And is the carrier’s relationship with San Antonio International reparable?
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Blessing or curse?
Southwest got its start in San Antonio when entrepreneur Rollin King and lawyer Herb Kelleher got together at the St. Anthony Hotel bar in 1966. They dreamed up a regional airline that would connect San Antonio, Houston and Dallas — the three points of the “Texas Triangle.”
The airline started flying in all three cities in 1971. Austin became the ninth city to join its network six years later.
Today, Southwest is the largest airline at both airports, flying about 37% of San Antonio’s passengers and 41% of Austin’s.
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The Austin announcement came amid a years-long shakeup of Southwest’s management and operations under pressure from hedge fund Elliott Investment Management, an activist investor in the airline. New leadership is in place, and the company has eliminated several passenger favorites, such as the “bags fly free” policy and open-seating system.
Securing a Southwest crew base will be big for Austin, said travel industry analyst Henry Harteveldt, president of San Francisco-based Atmosphere Research Group. Additional flight operations crews, pilots and flight attendants will make it easier to add flights from Austin’s airport.
Crew bases are essentially staff hubs where pilots and flight attendants usually start and end their shifts. Before the crew base opened, employees who live in Austin traveled to Dallas to start their work day, airline spokesman Lynn Lunsford told the Austin American-Statesman.
Southwest said in December that it would launch the crew base with 335 pilots and 650 flight attendants, and reach 2,000 employees by mid-2027. The city of Austin said the jobs will pay at least $22.05 an hour and include health benefits for spouses and dependents.
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The number of Southwest flights departing from Austin on its busiest days could jump to more than 200 from 130, Jordan said.
When the expansion is fully realized, it will be tougher for San Antonio to compete with Southwest’s offerings in the neighboring city, Harteveldt said.
The San Antonio and Austin airports are vying for customers living in the 80-mile stretch between the two facilities.
“There is a risk that some people who live between the two cities and prefer San Antonio, could shift their preferences to Austin,” Harteveldt said. “And as with any business, Southwest’s resources are finite. There are only so many aircraft, and there’s only so much money in its budget to invest in airport expansions and improvements. It wants to operate only so many crew bases.”
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“As Southwest invests in Austin, it’s going to make it that much tougher for the airline to justify investment in San Antonio, though not impossible,” he said.
But another industry consultant, Mike Boyd of Vail, Colorado, said airport officials here shouldn’t let the Southwest expansion get under their skin.
Boyd said San Antonio should focus on its own strengths rather than fretting over Southwest’s moves in Austin. After all, the two facilities aren’t really in the same league: Austin-Bergstrom’s total passenger count of 22 million people in 2025 was more than double San Antonio International’s 10.7 million travelers.
“They’re two different cities. You can’t compare them,” Boyd said. “Why did Southwest go there rather than here? The reason is Austin is much bigger. Austin is a tech center.”
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“It would be good to stop comparing and saying ‘How are they getting ahead of us? ‘” Boyd added. “To be blunt with you, Paris is probably getting ahead of you, too. Stop comparing it as being a sister city. It’s not. It’s got different economic dynamics.”
But it’s hard ignore the Austin expansion.
Keith Debbage, a professor emeritus at the University of North Carolina-Greensboro, said San Antonio could lose some Southwest flights as the airline increases spending in Austin.
He blames that possibility on the plan to keep Southwest in Terminal A.
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In 2024, shortly before suing the city, Southwest executives said they had plans to increase their San Antonio market share to half of all air travelers in the region — but Terminal A’s space constraints made that impossible.
“Now that we see what’s happening in Austin, sitting as an independent observer from afar, it does look like San Antonio shot itself in the foot,” said Debbage, who studies regional economic development and tourism.
But Southwest service cuts, if there are any, could be offset by new service from American Airlines, Delta Air Lines and several international carriers, which are slated to have gates in Terminal C.
“You never know — it might be a blessing,” he said.
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The new Austin crew base is Southwest’s 13th in the country and third in Texas behind sites at Houston’s William P. Hobby Airport and Dallas Love Field, which is the airline’s home airport.
“Everyone wants a part of Austin,” Jordan said during the December news conference. “Austin is forecasted by 2040 to be the fourth or fifth largest city in the country. Tremendous growth. Tremendous growth in the economy. That’s where we want to be. We love Austin.”
“This is all about being where the business is,” he added. “That business is in Austin, and that business is in Texas.”
The state is contributing $14 million to the expansion, and the city of Austin authorized subsidies worth $5.5 million.
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“We are flying aircraft and crews all across the country. Austin, given its size and growth, has been a critical consideration for quite a while,” Jordan said. “But I can absolutely tell you that this economic partnership made this decision easy.”
The city of Austin said Southwest plans to invest more than $8.4 million in airport improvements. The airport and carrier declined to provide details of those planned upgrades.
End game
Terminal A’s future remains unclear. It likely hinges on the settlement talks between the carrier and San Antonio.
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When airport officials unveiled a 20-year master plan in 2021 to expand the airport, including the construction of Terminal C, they said Terminal A could eventually be demolished, at least partially. But since then, the airport has invested millions into upgrades at 42-year-old facility and said major changes are on hold until after Terminal C opens in 2028.
In February, City Council approved a $35 million design contract with St. Louis, Missouri-based Hellmuth, Obata & Kassabaum, Inc. to begin making plans to revamp the airport’s two existing terminals.
Before council’s vote, Assistant City Manager Jeff Coyle and Saenz, the airport director, said Terminal A’s 75-foot concourse could be widened. But they said nothing about other possible renovations.
Previously, airport officials talked about cutting the number of gates in Terminal A to make room for larger waiting areas and reduce crowding that often blocks the concourse, as opposed to widening the concourse.
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It’s unclear what Southwest’s vision for Terminal A may be. The airline is continuing its legal push to void the lease assignments that City Council approved in 2024, which would force airlines and the city to negotiate new agreements.
Southwest has asked the U.S. Court of Appeals for the Fifth Circuit hear oral arguments in its case against San Antonio.
The city has until April 27 to file a response to Southwest’s appeal. In a March 11 court filing, San Antonio requested a 30-day extension to continue settlement talks.
The airport opened a new ground-load facility on Friday. The 40,000-square-foot facility connects to Terminal A and allows passengers to board from the tarmac. At a press conference celebrating the opening, Saenz declined to answer questions about the suit but said San Antonio and the airline are “in a really good place.”
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“We care genuinely about Southwest Airlines and encourage you to stay tuned,” he told reporters.
A year ago, Southwest also called on the Federal Aviation Administration to strip millions in San Antonio’s grant funding for alleged violations of federal law. The airline’s complaint mirrored the substance of the lawsuit.
The FAA is slated to rule on the complaint by April 5.
The parties tried to settle the suit out of court in December 2024 but failed to come to an agreement.
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The same year, eight airlines signed new, 10-year use and lease agreements, which designate which airlines will get space in the new terminal. Airlines that sign on get discounted rates to operate at the San Antonio airport.
Southwest wouldn’t say if it has signed a long-term lease at the airport. It had previously refused to enter a lease agreement as it pressed its lawsuit in federal court, resulting in the company paying higher rates than its competitors.
“Southwest Airlines was born in San Antonio more than 54 years ago, and we proudly carry more Customers to more destinations than any other airline serving San Antonio International Airport,” a Southwest spokesperson said in an email.
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“We remain hopeful we’ll reach a mutually beneficial agreement that allows us to continue providing friendly and reliable air travel to our loyal Customers in the Alamo City.”