How the Southwest Was Won…

Unless you have been hiding under a rock, you have most likely heard that Southwest Airlines was coming to Bay County’s Northwest Florida Panama City International Airport. Right after the announcement on Wednesday October 21st my iPhone started ringing endlessly as several dozen emails, press releases and Twitter updates made their way to my in-box. Obviously we are all very excited about the opportunity that is being presented to us. We are all very optimistic that The Southwest Effect will be awesome in Northwest Florida. The Southwest Effect was the term coined in 1993 by the U.S. Department of Transportation to describe the considerable boost in air traevel that invariably resulted from Southwest’s entry into new markets.
The simple fact that Southwest is coming to Bay County does not automatically ensure future success, however it does give us a solid foundation for optimism. Whether you are a supporter of the new international airport or not, this is fantastic news and brings a much needed low-cost carrier to the area to compete with Delta and Northwest.
What most people may not know is that Bay County was in a heated battle with Pensacola and Okaloosa County to lure Southwest to the Emerald Coast. All 3 suitors were offering packages of attractive economic incentives. It is reported that Pensacola offered to waive landing and airport fees for two years, provide a $3 million subsidy to Southwest over three years by adding a fifth penny to Escambia County’s lodging tax and donating over the next three years more than 45,000 nights at area hotels and condominiums that Southwest could sell or give to fliers in vacation packages.
Pledges from more than 300 individuals and business owners to donate money or in-kind services to Southwest were part of the economic incentives for Northwest Florida Regional in Okaloosa County.
The Southwest deal was won by strategic involvement of the St. Joe Company. I know many people have mixed feelings about St. Joe and their developments and involvement in Northwest Florida. I personally have been a proponent of St. Joe as I have always seen their strategic vision and their unwavering commitment to the success of our area. The deal with Southwest Airlines reinforces their strategic vision and commitment to the airport and Northwest Florida’s economic development.
St. Joe negotiated a “strategic partnership” with Southwest in which the company ensures the airline will break even on its service to West Bay for the first three years! That is correct, you read that right. St. Joe will reimburse Southwest for any losses it incurs, but the developer also will earn a shore of any profit the airline makes. St. Joe filed documents with the Securities and Exchange Commission on Wednesday that outlined an agreement to make quarterly payments to Southwest for its first three years of service in the event Southwest operates at a loss, up to $14 million the first year and $12 million the second year! That is truly a strategic commitment to the success of the new airport.
The agreement also stipulates that Southwest will not begin service in the next three years to other airports within 80 miles of the new Panama City airport.
I am truly excited about Southwest coming to Northwest Florida. It is a game changer and will positively affect the destiny of Northwest Florida. Hats off to St. Joe for putting some serious skin in the game.