DALLAS — Southwest Airlines (WN) has escalated its battle with San Antonio International Airport (SAT) by filing a lawsuit against the City of San Antonio and its Director of Airports, Jesus Saenz, according to Spectrum News. The airline claims unfair treatment in the assignment of gates at the airport's new Terminal C. 

The airline, which enjoys the largest market share at SAT, asserts that city officials made gate assignments before WN was even informed, essentially leaving it out of the new facility while keeping it in Terminal A, which the city itself has labeled as "functionally obsolete" and "undersized."

Southwest contends that internal documents show that the City of San Antonio manipulated the allocation process to keep the airline at Terminal A while other competitor airlines were awarded space in Terminal C. The USD$1.7 billion terminal, which opens in 2028, will double SAT's capacity with 17 new gates, improved amenities, and additional passenger services.

The airline argues that its exclusion from Terminal C unfairly affects its passengers, who account for 37% of SAT's total traffic, to use an inadequate and outdated facility to accommodate WN's increasing operations.

Piling on to its complaints, WN alleges that the city's cost allocation scheme discriminatorily groups Terminal A with Terminal C, charging WN more in fees while subsidizing its competitors who are granted access to the new terminal. Cirium Diio Mi data shows that WN occupied 36.1% of total seats at SAT in 2024 and was the airport's largest carrier.

FAA Complaint, Legal Action

In response to those worries, WN formally has asked the Federal Aviation Administration (FAA):

• To see whether federal laws were being broken, investigate SAT’s decision-making process.
• Ensure fair treatment for all tenant carriers operating at SAT that is not marked by discrimination.
• Avoid indirectly allowing the city to discriminate against WN through impending federal airport grants.
• Return to WN all excessive payments it has made in extra fees under what WN calls an unjust cost structure.

This FAA complaint follows a lawsuit filed in September 2024 in San Antonio federal court. WN accused the city of breaching by not correctly consulting airlines and biasing gate allocations. Meanwhile, the City of San Antonio has asked the court to dismiss the lawsuit, saying its decision was based on passenger distribution first instead of on who got special treatment.

Southwest has declined to sign SAT's 10-year lease contract, which became effective October 2024 and instead continues on a month-to-month basis. Consequently, the airline is paying increased operational charges and forgoing US$1.35 million in revenue-sharing incentives for signatory carriers.

The city government asserts that WN initially endorsed a US$200 million Terminal A renovation plan but subsequently opposed it after discovering that it would not be given space at Terminal C. WN maintains that Terminal A upgrades would be inadequate to address its future growth requirements at SAT.

San Antonio’s Response

San Antonio authorities denied any impropriety, stating that its gate allocation was conducted objectively to meet passenger load-balancing needs, reduce congestion, and improve security screening effectiveness. In a press release, city officials chastised WN for prioritizing business over passenger demand, labeling the airline's court appeal as a "creative spinning of half-truths" and not a legitimate regulatory complaint.

Since the FAA-facilitated negotiations between the two parties in December 2024 did not produce a settlement, the regulator will decide within 20 days whether to accept WN’s complaint for formal investigation.

If the FAA rules in WN’s favor, it can:

• Demand that the city reconsider gate assignments at Terminal C.
• Call for financial adjustments to ensure the costs are fairly apportioned.
•  Withhold future federal grants to SAT if the city stands guilty of acting against Federal aviation laws.

On the other hand, should the FAA go along with San Antonio, WN might have to continue operating at ever-higher costs and thus be permanently at a competitive disadvantage. That will make it even harder for WN to grow in SAT.

For now, WN continues to push for government intervention, arguing that its exclusion from Terminal C runs counter to federal guidelines and causes a heavy burden for passengers and the airline. 

The carrier, which brings in close to 40% of SAT passengers, believes it should share in any future expansion carried out by the airport.

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