Why Austin Airport’s New Independent Lounge Was Just Put On Hold

The Austin airport was supposed to be getting a new lounge accessible by American Express Platinum cardmembers. The airport solicited bids to run a new independent lounge, and selected MAG (“Manchester Airport Group”) USA which runs Escape lounges. A rendering of the lounge even suggested it might be a dual Escape Lounge-Centurion lounge which is the setup in Phoenix. However the City Council balked in a dispute over minority contracting rules.

The lounge was supposed to be:

  • Approximately 8000 square feet
  • On the mezzanine level of the main terminal across from gate 16, which is six gates away from the American and United clubs and squarely in Southwest Airlines territory
  • Featuring a local Austin chef curating the menu
  • Designed “with a ‘Zoning Concept’ theme [where e]ach zone will be named after a recognizable Austin neighborhood and will feature Austin inspired design, e.g. Downtown District, South Congress Café, Rainey Street.”

The City Council was expected to formally approve the lounge space award to MAG on January 23 however this was delayed to February 20th because Airport Dimensions, which operates lower quality ‘The Club’ lounges, filed a protest arguing that the city should accept lower rent from them since they are better positioned to meet government Airport Concession Disadvantaged Business Enterprise standards.

While the airport authority thought they’d work through these objections and get the project approved, that didn’t happen.

  • Austin airport has a Airport Concession Disadvantaged Business Enterprise goal of 11.06%. Airports score bids on the basis of whether they meet the goal, not on the basis by by how much.

  • The MAG contract hit 13% ACDBE by turning over operations of the lounge (but not ownership) to “D&B Mitchell Group, a Dallas-based, Black-owned business” which would take a percentage of revenue off he top. In addition MAG partnered with local Mozart’s coffee, which is minority-owned.

  • Airport Dimensions, which came in second and operates The Club lounges, had offered a 20% ownership stake to a local minority-owned business.

  • Airport Dimensions is also, oddly, claiming they’re a Texas-based company while MAG are a bunch of U.K.-based fer’ners. Airport Dimensions is part of the U.K.’s Collinson Group which owns Priority Pass. Locally-owned is an impermissible decision-making criteria under federal rules in any case.

In addition to MAG and Airport Dimensions, there were also bids from Plaza Premium and Turkey’s TAV Operations Services which runs Prime Class lounges. The MAG bid guaranteed nearly twice as much revenue to the airport as the second place Airport Dimensions bid.


AIrport Lounge Concession Bid Scoring Sheet

The City Council decided not to act on the lounge award, “to withdraw the airport lounge item and to have it reposted at another meeting with new wording once they have had more time to learn about the issues at hand.”

So what happens next? According to the airport communications manager “if the council does not decide to award MAG this lounge contract, the city would re-do the whole process with a new request for bids.”

While all of this plays out the Austin airport has only Delta, United, and American lounges – all of which now restrict use to passengers actually flying those airlines on the day of deprture. Even members of their respective clubs cannot access a lounge when flying Southwest or Spirit.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. I am tired of local governments imposing their narrow-minded, social reengineering visions on its citizens. This is the same city council that pushes HARD for public transportation. After 10+ years, they achieved 3% ridership (of the population) at an annual cost of $70,000 per rider. These are the same people who think they know who can operate a lounge best. PATHETIC.

  2. Ouch. Well, there’s definitely more than one reason that Gov Abbott calls it the People’s Republic of Austin.
    What a goat rodeo!!!

  3. I was super excited about this… it looked like the new lounge was going to hit it out of the park.

    Now I might get stuck with The Club… and because of this? I agree with the other poster in that this is PATHETIC.

  4. If they wanted to maximize public benefit they’d give it to Plaza Premium or TAV. Escape’s main selling point is that their lounges are exclusive, so fewer people will have access, which makes it mind-boggling how they can guarantee twice the revenue of any of the other groups. The Club’s Lounges are really bad. One wonders exactly what was considered in the scoring process.

  5. It’s long past time for race and gender-based discrimination to be completely banned from anything to do with the government, including banning affirmative action rules like this one. The skin color of the people who own or operate the lounge should be completely irrelevant to the process of awarding the contract. It should be based purely on the merit of the proposal.

  6. Maybe they thought MAG had a connection to MAGA and we know how liberal Austin is. Sort of like Gary.

  7. @ Deltahater, if Austin’s city population is pushing 964k ppl, 3% would mean a ridership of about 30k ppl. Are you suggesting that Austin spends $2.1B of city taxpayer money annually so 30k people can use mass transit? Do we double that figure to account for the greater Austin metro?

    A recent SA Express article last November places Austin transit expenditures at $208 per capita.

    https://www.expressnews.com/opinion/commentary/article/Nirenberg-We-can-fund-transit-and-protect-our-14855550.php

    Do you also discount the corresponding benefit of a reduction of vehicles clogging up our congested streets and taking up limited parking spots?

    Seems like you’re better at complaining about Austin than making compelling arguments.

    That said, this city council action is frustratingly expected.

  8. @Ari: That is 20th Century Bureaucratic Behemoth Public Transportation.

    Nowadays it is obsolete. It just carries air around. 21st century public transportation is Uber and Lyft. They pick you up where you are, when you want, use polite and clean drivers, and will get less expensive in the near future with the advent of autonomous cars. As a shared resource they use computers to compute optimal routes, removing the need for a personal car to commute.

  9. The People’s Republic of Austin’s City Council NEVER fails to disappoint. 25 years ago the then current Austin City Council wanted to relocate Robert Mueller Airport (the “old” airport) outside the city limits. Think about it . . . 25 years of all the direction of a windsock on a light and variable day unhampered by progress.

  10. @ Ari. Deltahater is correct. Unfortunate for Austin city taxpayers but nevertheless true. The only mass transit routes in Austin that are self sustaining are the UT Shuttles and even that may be doubtful with the current bunch. Same circus different clowns since 1977.

  11. Any idea when this will get resolved? The Club is terrible. Was really looking forward to the Escape/Amex lounge. ABIA needs more lounges! Fingers crossed it happens and construction begins soon!!

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