Southwest Airlines has become the first carrier to commit to a service launch from an airport under construction near Panama City, Florida.
Carrier CEO Gary Kelly today during the annual Southwest media day explained the airline plans launch service in May 2010 using a three-year revenue guarantee from Florida real estate developer The St. Joe Company.
Southwest plans to offer two daily flights to four destinations from the new airport, which is scheduled to open during the US Memorial Day holiday next year. Panama City will become Southwest's seventh destination in Florida, and the carrier will disclose specific markets it plans to serve from the airport at a later date.
The new facility, designed to replace the existing Panama City-Bay International airport, is located on property donated by The St. Joe Company, who owns roughly 71,000 acres of land surrounding the airport.
Citing the reasons Southwest sought the revenue guarantee, carrier chief Kelly explains: "We're not in an environment [where] we want to take a lot of risk".
In a regulatory filing The St. Joe Company explains it plans to make "quarterly cash payments to Southwest to cover shortfalls in the results of Southwest's operations at the new airport during the first three years of service". The St. Joe Company has termination rights if the payments to Southwest exceed $14 million during the carrier's first year of service or $12 million during the second year of service.
In addition, "Southwest may terminate the agreement if its actual annual revenues attributable to the air service at the new airport are less than certain minimum annual amounts established in the agreement," the St. Joe Company says.
Southwest also announced today the addition of nine new daily nonstops to six destinations from St. Louis starting in May 2010.
New operations include two daily flights to both Nashville and Los Angeles. Southwest will also link St. Louis with once daily service to
Raleigh/Durham, North Carolina; New Orleans, Louisiana; and the California cities of Seattle and San Diego.
In addition to new destinations from St. Louis, Southwest will add a third nonstop to Minnesota's Minneapolis-St. Paul International airport.