Southwest Adds Flights to Panama City

Southwest announced it will begin flying to Panama City, Florida, in May. Details on routes and pricing are not yet available. Southwest has only said it “will add at least two daily nonstop flights from northwest Florida to four destinations across its 68 airport network for a total of eight daily nonstop flights when it begins service next year.” Specific details will be available in December.

Interestingly, the first three years of Southwest’s service to Panama City will be subsidized by a local real estate developer. Terry Maxon at the Dallas Morning-News‘ Airline Biz blog reports St. Joe. Company, which owns 71,000 acres surrounding Panama City’s new airport (the airport Southwest will serve), will cover any Southwest losses in the first three years, ensuring the airline breaks even. (If losses exceed $14 million in year one or $12 million in year two—which I would guess is unlikely—St. Joe can opt out.)

The deal essentially shields Southwest from any risk while allowing the carrier to gain a foothold in a popular vacation area. As Maxon says, St. Joe is basically buying air service for the area. Very interesting, and very shrewd on the part of Southwest.