Jun 1, 2023 - News

Austin settles airport dispute as it moves forward with expansion

Illustration of Ben Franklin looking out of a plane window.

Illustration: Shoshana Gordon/Axios

Ending a fight that threatened to hold up expansion of the Austin airport, city officials Thursday approved an $88 million settlement with the firm that has operated the South Terminal.

The big picture: The city had to swallow a bitter pill after trying to to use eminent domain proceedings to take over the airport's South Terminal.

  • LoneStar Airport Holdings, which leases and operates the South Terminal, last year rejected a $1.9 million offer from the city to take it over.

What changed: In February, a panel of special commissioners in Travis County Probate Court ordered the city to pay as much as $90 million and enter into mediation to evict LoneStar.

Why it matters: The airport sometimes feels overwhelmed with traffic, and Austin officials want to add a new concourse with at least 10 new gates.

Details: The South Terminal, which opened in 2017, will be demolished under the city's expansion plan — probably by 2025 — no longer housing budget-friendly airlines like Allegiant and Frontier.

  • Austin airport executives have said the South Terminal needs to be demolished for a new taxiway to keep up with the high demand, as well as the new concourse.

What they're saying: "AUS is committed to providing ultra low cost carrier airline service for Austinites and Central Texans and will work with the South Terminal airlines to relocate them to the Barbara Jordan Terminal or other facilities," airport officials said in a statement.

Of note: The settlement will be paid via the airport's general fund, which receives no Austin taxpayer dollars.

  • The airport's general fund is made up of airport revenue, airport revenue bonds and federal grants and is separate from the City of Austin general fund.
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