As Southwest considers expansion, city of Austin looks to draw airline with incentives
by: Grace Reader
Posted: Dec 8, 2025 / 02:53 PM CST
Updated: Dec 8, 2025 / 09:38 PM CST
AUSTIN (KXAN) — Thursday, Austin city council is expected to vote on a potential incentive program with Southwest Airlines that could help the airline expand its footprint at the Austin airport.
“As the company meets growth plans, it seeks to expand facilities and operations infrastructure to support new flight capacity and employment growth. Southwest, on its mission to
find a suitable site for the business expansion, has pinpointed Austin as a potential viable location. However, there are multiple sites in competition, and therefore, is exploring State and Local incentives along with other cost drivers to make its selection,” council documents said.
Thursday, Austin city council will vote on whether it will allow the city to move forward with pitching the airline an incentive program that would encourage the airline to hire locally, shift money toward child care and further Southwest’s involvement in the city of Austin’s newly created infrastructure academy.
“A key part of what we’re doing with this potential agreement with Southwest is that … it will be a performance based incentive package where they are focused on hiring Austinites,” Austin Mayor Kirk Watson explained.
According to council documents, the city estimates Southwest expansion in Austin would create 2,000 new jobs in the airline industry “with an average wage of ~$180,000.” Documents said the city will propose a jobs-based award of $2,750 per job hired if the person lives in the city of Austin.
The incentive program would be for five years and pay the airline up to $5 million.
According to documents, the city would bring in nearly $20 million annually in local taxes alone from the expansion including $11,850,000 in tax revenue every year directly to the city (that includes retail sales tax, property tax and hotel occupancy tax expectations).
A 10% cut of that per job award would go toward the city’s Childcare Assistance Reserve Fund.
“This is a win-win-win-win kind of deal, where we’re focused with kind of a laser focus on affordability, but the way we’re focusing on affordability is making sure people have the incomes to be able to afford to stay in Austin,” Watson said.
“Southwest appreciates the leadership of Mayor Kirk Watson and the Austin City Council and we look forward to working with them as we make Austin and Central Texas an even bigger part of Southwest’s future,” a spokesperson for the airline said.
https://www.kxan.com/news/local/austin/a...n-looks-to-draw-airline-with-incentives/
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