Route Development
Southwest Airlines and San Antonio Settle Gate Dispute for Terminal Expansion
Southwest Airlines and San Antonio resolve legal dispute, securing six gates for Southwest and enabling the $1.7B Terminal C expansion at SAT to proceed.
This article summarizes reporting by News4SanAntonio and Christopher Hoffman.
Southwest Airlines and the City of San Antonio have officially resolved their nearly two-year legal battle over gate allocations and lease agreements. According to reporting by News4SanAntonio, the settlement clears the way for the airport’s massive terminal expansion project to proceed without the looming threat of litigation.
The dispute, which began in late 2024, centered on the airport’s multibillion-dollar redevelopment plan and the initial exclusion of Southwest from the planned state-of-the-art Terminal C. The newly reached agreement guarantees the airline a modernized footprint and resolves outstanding financial disagreements between the carrier and the city.
By signing a new Airline Use and Lease Agreement (AULA), Southwest has agreed to drop all pending federal lawsuits and regulatory complaints, ending a high-stakes standoff between San Antonio International Airport (SAT) and its largest carrier.
Details of the Settlement Agreement
The core of the resolution revolves around guaranteed gate access for Southwest Airlines. Under the new terms detailed in comprehensive industry research regarding the settlement, the carrier is assured a minimum of six gates at San Antonio International Airport.
Securing a Spot in Terminal C
When the new 17-gate Terminal C opens, currently projected by airport officials for 2028, Southwest will be allocated three gates within the new facility. Additionally, the airline will receive three gates in a newly renovated Terminal B. This represents a significant compromise from the city’s initial plan, which would have kept Southwest entirely in the aging Terminal A.
The settlement also addresses financial disputes related to airport rates and charges that date back to October 2024. In exchange for these concessions, Southwest is withdrawing its federal lawsuit against the city and its complaints filed with the Federal Aviation Administration (FAA).
“Together, Southwest and SAT look forward to a continued partnership that benefits San Antonio and supports the Airport’s mission,”
This statement was part of a joint release issued by Southwest and SAT to announce the resolution.
Background of the Bitter Dispute
Tensions flared in September 2024 when San Antonio officials announced that Delta Airlines, American Airlines, and various international carriers would occupy the new Terminal C. According to industry research data, Southwest accounts for approximately 37% of all passenger traffic at SAT, yet the airline was slated to remain in Terminal A, a facility not scheduled for renovation until after 2028.
Legal Escalation and FAA Complaints
Feeling sidelined, Southwest refused to sign a long-term lease and launched a federal lawsuit against the City of San Antonio and Airport Director Jesus Saenz. The airline alleged a “bait and switch,” claiming they had originally been promised 10 gates in the new terminal. They argued the city’s gate assignment process was discriminatory and violated the Airline Deregulation Act.
The legal battle saw Southwest escalate matters in March 2025 by filing an FAA complaint, threatening millions in federal grants for the airport. However, in August 2025, U.S. District Judge Xavier Rodriguez dismissed the lawsuit. Southwest appealed the decision, leading to the settlement negotiations that concluded in early May 2026.
“What we have done here is give everybody a win-win situation. We all want what’s best for the city…”
Airport Director Jesus Saenz offered these remarks following the successful negotiation of the new lease agreement.
AirPro News analysis
We view this settlement as a critical unblocking maneuver for San Antonio’s infrastructure ambitions. According to project data, the $1.7 billion Terminal Development Program is the largest construction project in the airport’s history. Prolonged litigation with the FAA and Southwest could have severely delayed construction timelines and jeopardized essential federal funding.
For Southwest, securing a presence in Terminal C is a strategic victory that protects its brand standard and passenger experience in a market where it has historically dominated as the primary low-cost carrier. However, with Southwest taking three of the 17 gates in Terminal C, airport planners will now have to carefully shuffle the remaining allocations among American, Delta, United, and international partners to maintain harmony among its tenants.
Frequently Asked Questions
When is the new Terminal C expected to open?
According to current project timelines, the new Terminal C at San Antonio International Airport is projected to open in 2028.
How many gates will Southwest have in the new agreement?
Southwest is guaranteed a minimum of six gates: three in the new Terminal C and three in the renovated Terminal B.
Why did Southwest sue the airport?
Southwest sued after being excluded from the initial plans for Terminal C, alleging the city used discriminatory practices to favor other airlines and reneged on a prior promise to allocate them 10 gates in the new facility.
Sources
Photo Credit: Southwest Airlines