The deal awards Southwest $2,750 for each new Austin-based hire.
AUSTIN, Texas — Texas Gov. Greg Abbott and Austin Mayor Kirk Watson held a press conference Friday to discuss a new deal with Southwest Airlines and its expected impact on the city.
The deal, approved Thursday by the Austin City Council, awards Southwest $2,750 for each new Austin-based hire over the next five years. In exchange, the airline plans to add 2,000 high-paying jobs with an average salary of $180,000 and invest in local workforce initiatives, including the city’s new Austin Infrastructure Academy.
Officials say the deal will strengthen Southwest’s presence at Austin-Bergstrom International Airport, where the carrier already handles more than 40% of all passenger traffic.
The partnership is expected to bring in nearly $20 million in local tax revenue, and the incentive program will last for five years and pay Southwest up to $5.5 million.
Mayor Watson said the agreement will not only create new jobs in Austin but will improve the overall experience at AUS.
“We’re building lives and careers at the same time we’re building tarmacs and terminals,” Watson said. “Southwest is choosing Austin because our people, our workforce, and our future make us a smart investment. This deal creates thousands of good-paying jobs, improves the passenger experience, and ensures the benefits flow directly to Austin workers, families, and tourists. This agreement is proof that Austin means business and cares about the success of its people.”
“This agreement marks a promising step forward by delivering more reliable, frequent flights for travelers while also bringing thousands of strong union jobs to our city,” Mayor Pro Tem Vanessa Fuentes, whose district includes the airport, told KVUE in a statement earlier this week. “By prioritizing local hiring, living wages and strong worker protections, we can make sure this project truly benefits the people who call Austin home.”
Southwest will also donate 10% of its per-job incentive to the city’s new child care assistance fund, and the funding will be contingent upon performance and compliance evaluations. It’s a new, dedicated city reserve created under the Business Expansion Program guidelines that aims to support child care affordability and access for working families by expanding access to child care programs through taxes raised from business attraction initiatives.
The Austin airport is in the midst of a multibillion-dollar expansion, and city officials are renegotiating 10-year contracts with airlines to help fund the project. Airlines pay rent for gates, runways and terminal space, but the new agreements are expected to lock in long-term commitments needed to cover the expansion’s costs.
Southwest plans to nearly double its gate count when a second terminal opens in 2030 and it’s aiming to become the anchor tenant in that facility. The Dallas-based airline currently has 10 gates at the airport and could grow that to 18 gates with the expansion.