San Antonio is building a new Terminal C with 17 gates that’s planned to open in 2028. Southwest says it was promised gates in the new terminal, but when the city finalized its Airline Use & Lease Agreement they told the airline it would stay in terminal A. Southwest sued – and lost.
- Southwest refused to sign the new lease agreement.
- Airlines that aren’t signatories pay a higher rate for gate space, ticket counters, and everything else at the airport.
- But Southwest keeps sending checks at the old, lower rates.
The city didn’t cash the check. They say Southwest owes $20 million, and has sent just $12.6 million. They were afraid that if they cashed the checks, Southwest would argue the airport accepted the amounts as correct (sort of like the U.S. claiming Guantanamo Bay in Cuba based on early rent checks cashed in haste at the onset of the Cuban Revolution – and each month we’ve continued sending the checks, though Cuba stopped cashing them).
Meanwhile, the airport is converting Southwest’s proprietary counters and gates to Common Use. That means no more branding, kiosks, or even boarding group stanchions. They haven’t signed the lease, they don’t get dedicated branding reserved for airlines that do.
Southwest, though, has complained to the Department of Transportation saying the whole thing is illegal (even though a court disagreed). DOT was supposed to respond in early October, but gave themselves a two month extension. The government shutdown may delay this further.
Ironically, it seems one reason San Antonio didn’t want to move Southwest to the new gates because the terminal would offer lounge space and Southwest wasn’t going to want to rent that, but Southwest now wants lounges. Southwest, as the largest carrier at the airport, figures it’s paying for the new terminal and should get to use it.
Common use status will raise Southwest’s costs, and could make their more marginal routes less attractive. This seems like a risky hardball strategy for the airport, because it could cost them air service.
(HT: PaxEx.aero)
LOL at “even though a court disagreed.” Psh, Gary, which ‘court’? Keep appealing to the Supremes, pay your gratuities to the 6 corrupt ones, and say nice things about Dear Leader.
But maybe other airlines will come in a swoop the Southwest agreements and utilize the airport more of a small hub and use the lounge space.
@Wayne Zitter — Bah! Yeah, Delta would jump at the opportunity to swoop in. Quick, call Tim!
Do businesses actual send checks today? Honest question. I just assumed electronic transfers.
Some still send checks to a few vendors. You’d be shocked that some large municipalities still require it because of either outdated financial systems or the controls they have in place for audit/accountability purposes. Most will take a wire transfer and are paid that way.
I know that Spirit in fact tries to pay as many vendors as possible by credit card, offering better payment terms like a net30 versus net60 in exchange. Then they use the cash back/points from the credit card as a rebate. Of course they then auto-pay the credit card one bill at a time as the charges post.