ALTA: Government gets behind Panama's aviation hub ambitions

Panama City
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Buoyed by the rapidly growing Copa Airlines and a business-friendly environment, Panama has grown into one of the top aviation hubs in the region and plans to maintain a leading edge over its competitors.

Panama City Tocumen International Airport handled 5.5 million passengers in 2011, and is on track to welcoming more than six million in 2012. The airport's passenger traffic is almost twice the country's population of 3.2 million. Of the 5.5 million passengers that passed through Tocumen in 2011, about 3.5 million were transit passengers, testifying to the airport's strength as a point for travellers to connect through in the region.

Panama's director general of civil aviation Rafael Barcenas attributes Panama's success to its strategic geographical location, aviation-friendly government policies and the strength of Copa, which is based at Tocumen. Passengers transiting through Panama will not have to go through a second security check, making connections fuss-free, he adds.

"We are in the middle of the Americas, we are a safe country and there are not many problems with crime. It's an appealing place to do business," says Barcenas in an interview with Airline Business Daily, pointing out that many multi-national companies have chosen to open offices in Panama.

He gives credit to an open-minded government that has understood the need to invest in infrastructure to help the aviation industry grow. "This administration has invested $300 million...Every penny you put into aviation, you will get it back and more," says Barcenas.

The state-owned airport will add a new south terminal, following a $670 million contract awarded recently to build the new facility. The new terminal, which will be completed in three to four years, will add at least 20 new gates to the airport and allow airlines to deploy more widebodies to Panama City. Currently, a widebody aircraft at the airport takes up two gates, says Barcenas.

Beyond the new terminal, the government is studying a possible third runway for Tocumen. The airport's two existing runways are very close, says Barcenas, and having a third runway will allow parallel landings of two aircraft simultaneously. "It will also give us more flexibility, like when we need to close one runway for repairs."

A new terminal and a third runway will help the airport handle increased passenger traffic in the near future, as Panama looks set to welcome more visitors. Aside from the Panama Canal, the Central American country is growing in popularity among travellers who visit for golf and beach holidays, as well as retirees and home owners who have purchased beach residences. Panama, which uses the US dollar as its currency, is proving popular among American visitors. Of the two million passengers handled by Tocumen in 2011 who ended their journeys in Panama, about 1.2 million are Americans. At least half of these are tourists, says Barcenas. "If the US does better, we are going to do better," he adds.

Panama's tourism authorities have played a part to ensure that infrastructure is in place to support the increased number of visitors. New hotels, such as the Hard Rock Hotel Panama Megapolis, have added thousands of rooms to the city.

On the authorities' to-do list next is to lure more foreign carriers to the country, says Barcenas. European carriers like Lufthansa and British Airways have shown interest in serving Panama. In particular, Lufthansa has shown "a lot of interest", especially now that Copa is part of the Star Alliance with the German carrier, says Barcenas. There is also a possibility of South Korea's Asiana Airlines codesharing on Copa's flights from Los Angeles.

Beyond Panama City, the government is investing in airports in three cities in the country. These are the northern sea port of Colon, the second largest Panamanian city of David and Rio Hato, known for its beach resorts.

A new international airport in Colon will be ready in April 2013 while renovation work at David's airport will be completed by 31 November, says Barcenas. In the meantime, a new terminal is being built at the previous military base in Rio Hato, which will be ready in July 2013.

While Panama has gradually made a name for itself as an aviation hub in the region, Barcenas does not want the country to rest on its laurels. While he believes that Panama is "far more appealing" for air connections than other countries in the region, he says there are still improvements that can be made.

At the end of the day, keeping an open mind and not clinging to protectionist policies will help Panama keep its edge in the region, he believes. "Today you might be good, but tomorrow you might not be."