Commission authorizes negotiation of long-term airline agreements to back AUS expansion

The Austin airport commission unanimously authorized staff to negotiate and execute signatory and non‑signatory airline use-and-lease agreements designed to underpin the airport expansion and development program at Austin Bergstrom International Airport (AUS).

The agreements, as read into the record by Tracy Thompson, would govern commercial and cargo airline operations at AUS from Jan. 1, 2026, through Sept. 30, 2035, with a promotional two-year extension option. Thompson characterized the agreements as the funding foundation for the expansion program and said airlines committed to leasing new gates and participating in the Airport Expansion and Development Program (AEDP).

The authorization is intended to enable the city to move toward bond-market financing in early next year, staff and commissioners said. “These agreements will govern how the commercial passenger and cargo airlines operate in AUS for the next decade,” Thompson told the commission, adding that the final gate allocation and total program cost will be shared publicly once the airlines and city finalize details, tentatively in December 2025–January 2026.

Kirk Mixon, director in Delta’s corporate real estate and airport affairs group, said Delta supports the use-and-lease agreement because it promotes operational sustainability, capital investment and improved customer experience that will accommodate continued growth in Central Texas. “Delta certainly supports the use and lease agreement that you guys are, have in front of you today,” Mixon said.

Sherry Hall, director of governmental affairs for Southwest Airlines, said Southwest expects to be an anchor tenant in a future Concourse B and that the airline is planning to grow to as many as 18 gates there pending approvals. “We look forward, pending approval, of being the anchor tenant in the new Concourse B and really growing our service,” Hall said.

Airport financial staff presented the budget implications tied to the new rate methodology the use-and-lease approach uses. Thomas, an airport finance staffer, told commissioners the shift to a commercial-compensatory rate methodology and a reduced terminal divisor increases terminal rental rates and is projected to raise airline-derived revenues by roughly $77 million in FY26, producing an estimated $74 million increase in total operating revenue. Staff also forecast roughly $800 million in capital spending in FY26 driven by AEDP projects, and said the program anticipates delivering more than 20 additional gates by about 2030.

Commissioners pressed staff on operational details. One commissioner asked whether TSA staffing will be sufficient for additional checkpoints; Thomas said airport leadership is meeting regularly with federal partners, including TSA and FAA officials in Washington, to secure personnel and resources. Another commissioner asked whether higher airline-derived rates would drive up fares; Thomas said the airport is setting rates to generate needed net revenues to fund capital outlays and reduce future debt issuance but declined to predict airline pricing strategies.

The motion to authorize negotiation and execution was made and seconded on the record; the chair announced the motion passed unanimously. Thompson and staff said the authorization does not finalize the agreements—final execution will follow additional negotiation and city-council action.

Next steps, as described to the commission, include continuing negotiations with airline partners, finalizing program cost and gate allocation, briefing the city council and preparing for bond-market outreach in the first quarter of next year.

The commission moved on to other agenda items after the vote; no further formal action on the agreements was taken at the meeting.