AUSTIN (KXAN) — Negotiations are underway between airlines and Austin-Bergstrom International Airport that will help determine the future of AUS — and Southwest hopes to play a big role, saying it wants to be the “anchor tenant” in the airport’s new concourse.
The airport is updating its use and lease agreement with airlines, expected to go in effect Jan. 1 and last until at least 2035. The agreements determine rates, fees and charges that airlines — both passenger and cargo — must pay AUS to use airfield and terminal areas, including runways, gates, ticketing and baggage areas.
The agreement is especially important now as the airport plans to build an additional terminal, featuring at least 20 new gates, starting next year, which will almost double capacity at AUS. Current plans call for construction to be complete in 2030, meaning agreements signed now will be instrumental in determining which airlines occupy space in the new terminal.
“Unlike many large airports in the United States, AUS is not a hub to any single airline, and that makes this a vote of confidence from our collective signatory airline partners,” Tracy Thompson, chief business officer at AUS, said in a meeting of the Airport Advisory Commission (AAC) Wednesday. “They are choosing to make long-term commitments and big investments in Austin because they believe in the growth of this market and in our region’s future.”
While negotiations have been taking place for years, nothing is finalized yet, so it’s unclear which airlines will sign the agreement, but Alaska Airlines, American Airlines, Delta Air Lines, JetBlue Airways, Southwest Airlines, Spirit Airlines and United Airlines are all current signatory airlines under the existing lease. All other airlines that operate at AUS do so on a month-to-month contract, an airport spokesperson said.
The current use and lease agreement expired in September 2024, according to the airport, and signatory airlines have also been on a month-to-month agreement since then. Representatives from both Delta and Southwest spoke in favor of the new agreement at Wednesday’s AAC meeting.
“What you’re reviewing today is significantly important, not just for Central Texas and creating a world-class airport for a world-class city, but also for Southwest Airlines and our future plans to serve the market,” Sherri Hull, Southwest’s director of governmental affairs, said.
“We look forward, pending approval, to being the anchor tenant in the new Concourse B and really growing our service,” Hull said. “We’re going to grow our gates to 18 gates, pending execution and pending approval, and that’s huge. When you think about that growth, that signals not just a lot of gates, but a lot of flights. A lot of flights means a lot of passengers and a tremendous economic impact to the city of Austin.”
The airport currently has 33 active gates at the main terminal, with three others at the South Terminal, which is set to close early next year to make way for the new concourse.
Southwest is already the largest airline operating at AUS in terms of passenger totals, by far. In the first six months of the year, Southwest accounted for 41.4% of all passenger traffic at the airport, with more than 4.2 million passengers.
Delta has also been making great strides in recent years, with a slew of new nonstop offerings. The airline overtook American Airlines as the second-largest at AUS in May and is on the verge of surpassing American’s cumulative passenger total so far this year. Kirk Mixon, director in Delta’s airport affairs team, said his airline views the new use and lease agreement as a “critical next step,” saying growth at AUS is going to continue.
“We’re excited about the lease. We’re excited about the investment,” Mixon said. “Certainly, Delta supports this opportunity and we’re looking forward to partnering with Austin, continuing to partner with the airport and obviously the communities around Central Texas to enable this growth that we think is critical.”
Thompson said airlines that sign the agreement are committing to the Airport Expansion and Development Program (AEDP), which is the airport’s blueprint for expansion and modernization.
“Airports and airlines have to be collaborative, and that has never been more important in the history of Austin-Bergstrom International Airport than it is right now,” Thompson said. “Going forward from this point forward, with this agreement, it’s a partnership.”
The majority of funding for the AEDP comes from airport revenue bonds and airport-generated revenues, including airline fees. The use and lease agreement doesn’t identify the exact fee an airline must pay, but it does identify the methodology for calculating that fee, an airport spokesperson told KXAN.
“It’s critical that we understand from the airlines what their facility needs are for the 2030s and well beyond and calculate rent and other fee methodologies to a structure that will allow us to pay for the expansion program to meet their growth needs,” the spokesperson said.
The AAC voted to recommend that City Council approve the use and lease agreement, effective Jan. 1. Thompson said approving the agreement soon is an important step to prevent future delays.
“It takes months for a huge corporation, like a Delta or Southwest, to get this level of agreement through their executive team, their legal team and sometimes their board of directors,” Thompson said. “And they don’t want to go through that process unless they know the city of Austin has approved it.”