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Council approves legal action to close South Terminal

Friday, June 17, 2022 by Jo Clifton

City Council on Thursday authorized city’s legal staff to move forward with eminent domain proceedings against the owner of the South Terminal at Austin-Bergstrom International Airport. No Council member commented on the item, but the vote was unanimous.

Before the vote, Jeff Pearse, CEO of LoneStar Airport Holdings, which operates the South Terminal, predicted that closing the terminal would kill ultra-low-cost carrier service from Austin. Allegiant and Frontier airlines currently operate out of the low-cost terminal. In a prepared statement, he said, “Options for price-sensitive travelers will disappear in our market.”

Airport officials dispute that. A spokesperson for AUS told the Austin Monitor, “The Department of Aviation continues to progress with airport improvement projects to deliver an improved passenger experience for all AUS customers and increase capacity for more flights through the airport expansion and development program.

“A vital component of the program is the development of the new midfield concourse, which necessitates the future closure of the South Terminal. The Department of Aviation will continue to work with all business stakeholders and tenants throughout the duration of this program and looks forward to delivering an improved passenger experience to all AUS customers.”

However, Pearse warned, “The airport’s pursuit of eminent domain ignores the 40-year lease obligation to LoneStar and will result in years of expensive, time-consuming litigation, delaying expansion plans even further and sending a signal to every business in Austin that making major investments alongside the city is a dangerous bet. This isn’t eminent domain. It is the taking of a business.”

The eminent domain litigation will be the second suit involving the airport this year. Environmental groups have filed suit in federal court in Washington, D.C., against the Federal Aviation Administration in an attempt to prevent the airport from establishing new fuel tanks at the airport.

In a letter to Mayor Steve Adler and Council, Pearse noted that the South Terminal helped to alleviate crowding at the main terminal. He said that in 2016 the ultra-low-cost airlines offered 1,675 departing flights from Austin and in 2019 that number jumped to more than 6,500 departing flights, “thanks to our cost-effective terminal.”

Pearse also argued that his company had offered a better deal to Council that would have provided an additional “10 gates, five security lanes and 22 check-in counters … all while clearing the area where the current South Terminal sits for the main terminal’s much-needed continued expansion.”

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