San Antonio’s largest airline, Southwest Airlines, has filed a lawsuit against the city in an attempt to block a new airline lease agreement. This agreement would exclude Southwest from a new $1.4 billion terminal currently under development.

The lawsuit, filed in the U.S. District Court, alleges that the city engaged in a “bait and switch” tactic. Despite assurances from San Antonio Director of Airports Jesus Saenz that Southwest would have space in the new Terminal C, the airline was ultimately assigned 10 gates in the older Terminal A instead.

Southwest Airlines argues that the city used subjective selection criteria in determining which airlines would get space in the new terminal, favoring factors such as international routes and airline lounges.

While eight other airlines have already committed to the new agreement, Southwest is seeking to block it from taking effect on October 1. The airline faces higher rates if it does not sign the agreement.

City Manager Erik Walsh expressed concerns that the lawsuit could disrupt the entire Terminal Development Program, potentially halting progress on the new terminal.

Southwest Airlines remains optimistic about finding a resolution with city leaders. The airline hopes to reach a mutually beneficial solution before the lease agreement goes into effect.

‘Back to square one’

Negotiations between Southwest Airlines and the city of San Antonio hit a roadblock following a Tuesday meeting in Dallas. Southwest executives raised concerns about funding for terminal improvements and threatened legal action if the execution of the new lease agreement was not postponed.