Southwest Rapid Rewards - Southwest announces intent to start service at Panama City, Florida




curbcrusher
Oct 21, 09, 1:12 pm
On the Media Day webcast, Gary Kelly just announced that WN will start service at PFN in May 2010.


Beckles
Oct 21, 09, 1:14 pm
May 2010 for service start, bummer they'll miss the Spring Break season.

edited to add: Start with 2 flights daily to 4 WN destinations (8 total). BNA and BWI already mentioned, I would guess HOU and MDW on top of that.

St. Joe Company (http://www.joe.com/) is taking on the financial risk for the first three years of WN's operations.

More details of the agreement with St. Joe in this 8-K filing (http://www.sec.gov/Archives/edgar/data/745308/000129993309004137/htm_34733.htm). WN is not allowed to begin new service to any airport within 80 miles during the three year agreement and service to an airport 80-120 miles away would require renegotiation of the agreement. St. Joe can opt out if their payment to WN exceeds $14 million in year one or $12 million in year two. If St. Joe makes payments to WN and the flights later become profitable, they will be reimbursed for the earlier payments by WN.

ElmhurstNick
Oct 21, 09, 1:21 pm
Never been to that part of the state. Nice to have another option. Is it possible that TPA or FLL might be one of the cities for intra-state travel/repositioning?


gmax58
Oct 21, 09, 1:24 pm
I'm going to guess HOU and either MCO or TPA. MDW would actually be a really solid idea, too, to shore up flights to the interior West.

chuckworth
Oct 21, 09, 1:31 pm
Included in the announcement today was intent to grow operations at STL by adding new non-stop service in six markets and additional flights in two others. Details just posted by Bill Owen on blogsouthwest (http://www.blogsouthwest.com/blog/news-flash-new-service-coming-next-may)

curbcrusher
Oct 21, 09, 1:38 pm
Gary Kelly said PFN service is forecasted to work with 8 roundtrips with only 1% conversion of automobile traffic to air traffic.

N830MH
Oct 21, 09, 2:12 pm
Gary Kelly said PFN service is forecasted to work with 8 roundtrips with only 1% conversion of automobile traffic to air traffic.

That's not enough the O/D daily passengers traffic. When WN will have enough more profitability routes out of PFN. I think in the future if WN will have to bring more capacity growth. Let's see how it going in PFN and before PNS will be next.

tusphotog
Oct 21, 09, 2:20 pm
Ugh....how about Charlotte? Stop ignoring the Southeast, WN.

And no, GSP would not be a viable alternative to CLT.

Berto
Oct 21, 09, 2:47 pm
As a UCF student who calls Panama City home when not in Orlando, I find this to be great news. Now I am not a fan of Southwest by any measure, but I am happy to see some movement into the market. Right now PFN just has DL/NW CRJs to Memphis and Atlanta, and lets face it fares are not exactly the lowest in the panhandle due to the lack of competition. In other words...hooray for competition! ^

The local paper claims that two of the cities will be BWI and BNA (http://www.newsherald.com/articles/bay-78462-west-county.html), but I could have sworn I read elsewhere that the 8 flights would be two 4 different cities. Either way this is interesting and helps validate the new airport and hopefully can silence some of the people who claimed that SW would never fly to the new facility that opens in May '10...

uncertaintraveler
Oct 21, 09, 2:48 pm
Stop ignoring the Southeast, WN.

^

I'm still waiting for HOU - ATL flights to show up in WN's timetable...

gsupstate
Oct 21, 09, 2:56 pm
Ugh....how about Charlotte? Stop ignoring the Southeast, WN.

And no, GSP would not be a viable alternative to CLT.

There's no argument that the GSP metro area in and of itself is not the size of CLT's, but that doesn't tell the whole tale. GSP is, though, well-positioned in between ATL and CLT and can draw from a very large region including Western N. Carolina, NE Georgia and the Midlands of SC besides those two population centers.

Not to mention the fact that if you factor back in the 60% of the GSP market that doesn't use GSP currently due to high airfares (which the entry of WN, FL, etc would correct to the majority of destinations), you'd have around 3 million pax a year, just in this market alone. I think GSP is a quite viable (and much more passenger-friendly) alternative to ATL or CLT for WN.

N830MH
Oct 21, 09, 3:19 pm
Ugh....how about Charlotte? Stop ignoring the Southeast, WN.

And no, GSP would not be a viable alternative to CLT.

Nope...Not yet. You probability will wait to see in the future. You will find out for another announcement more new cities for next year in 2010.

tusphotog
Oct 21, 09, 3:50 pm
Not to mention the fact that if you factor back in the 60% of the GSP market that doesn't use GSP currently due to high airfares (which the entry of WN, FL, etc would correct to the majority of destinations), you'd have around 3 million pax a year, just in this market alone. I think GSP is a quite viable (and much more passenger-friendly) alternative to ATL or CLT for WN.

This is all wonderful, but if WN is concentrating on business travelers (which is evident from their recent entries into LGA, BOS, MSP etc), why on earth would someone fly to GSP and then drive two hours to Charlotte? Sure, it works for the those who work for Michelin or BMW, but look at the corporate hq's in Charlotte: B of A, Wells Fargo/Wachovia, Goodrich, Loews (yeah, yeah, they're not technically in Charlotte), and so on.

kerflumexed
Oct 21, 09, 4:30 pm
I am waiting for the special SWA perks ya get if you now live or buy into a St. Joe community. A-List for the family? One companion pass per household? Complimentary Early Bird, etc.

((I still miss the early morning coffee, OJ, and doughnuts that SWA had at the Austin airport.))

JerryFF
Oct 21, 09, 5:00 pm
Included in the announcement today was intent to grow operations at STL by adding new non-stop service in six markets and additional flights in two others. Details just posted by Bill Owen on blogsouthwest (http://www.blogsouthwest.com/blog/news-flash-new-service-coming-next-may)

That makes sense given AA's big cutback in STL.

gsupstate
Oct 21, 09, 5:28 pm
This is all wonderful, but if WN is concentrating on business travelers (which is evident from their recent entries into LGA, BOS, MSP etc), why on earth would someone fly to GSP and then drive two hours to Charlotte? Sure, it works for the those who work for Michelin or BMW, but look at the corporate hq's in Charlotte: B of A, Wells Fargo/Wachovia, Goodrich, Loews (yeah, yeah, they're not technically in Charlotte), and so on.

Where, oh where do I start? First of all, there's also significant business travel generated in GSP's market by GE (not only HUGE manufacturing but the Engineering HQ for their entire Energy unit) and Fluor Engineering - they have a campus here and handle nuclear energy projects around the globe, among other things. Then there's all the automotive suppliers, and more besides that. They're announcing a company moving operations and/or headquarters to this area weekly.

And, as we're talking about PFN here, that market and WN's decision to serve it, fly in the face of your argument. So, I stand by my reasoning.

tusphotog
Oct 21, 09, 8:56 pm
And, as we're talking about PFN here, that market and WN's decision to serve it, fly in the face of your argument. So, I stand by my reasoning.

WN is getting a huge subsidy for PFN from St. Joe Co. That's why they're flying there. Do you honestly think they'd fly to PFN without that subsidy?

gsupstate
Oct 21, 09, 9:09 pm
WN is getting a huge subsidy for PFN from St. Joe Co. That's why they're flying there. Do you honestly think they'd fly to PFN without that subsidy?

Not normally. I was hoping that sanity still reigned at WN headquarters.... But that doesn't affect my argument.

HackyMcHack
Oct 21, 09, 9:33 pm
The good thing about the new Panama City Beach airport is that it is located at the west end of Bay County, giving easy access to the beaches of southern Walton County and Destin. The road situation (frequent, major congestion via Fort Walton Beach; a two-lane road and a two-lane toll bridge via Niceville) makes it almost impossible at times to get from VPS to Destin in any decent amount of time.

The people that run VPS are now going to need to either land another LCC (JetBlue? Midwest?) or wrestle AirTran back from PNS in order to remain a viable airport, especially if PNS gets Southwest, as well.

curbcrusher
Oct 21, 09, 11:00 pm
Video from the Panama City press conference is available here:

http://www.newsherald.com/video/?videoId=45833402001&lineupId=1171892348

jfinsocal
Oct 22, 09, 1:10 am
Why would Southwest go to Pensacola instead of Mobile? Mobile is bigger and isn't Pensacola basically a suburb of Mobile? Go to Mobile and you also grab Pensacola; kill two birds with one stone per se.

Good luck to them in the new service to PFN airport.

curbcrusher
Oct 22, 09, 8:26 am
This morning's editorial (http://www.newsherald.com/common/printer/view.php?db=newsherald&id=78467) in Panama City's New Herald describes yesterday's big win for PFN:

EDITORIAL: Bay's big catch

The announcement Wednesday that Southwest Airlines will begin service to the new Northwest Florida-Panama City International Airport when it opens in May is like a professional sports team signing a big-name free agent.

It doesn’t ensure future success, but it does give the fan base abundant grounds for optimism.

[...]

Indeed, Bay County’s airport was in a heated battle with Pensacola and Okaloosa County to lure Southwest to the Panhandle. All were furiously offering packages of economic incentives. For example, Pensacola reportedly dangled waiving landing and airport fees for two years, providing 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.

The inducements offered by Okaloosa’s Northwest Florida Regional reportedly included pledges from more than 300 individuals and business owners to donate money or in-kind services to Southwest.

What tipped the scales in Bay County’s favor was the unique involvement of the St. Joe Co.

St. Joe, the largest landowner in Northwest Florida, 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. St. Joe will reimburse Southwest for any losses it incurs, but the developer also will earn a share of any profit the airline makes. Under the agreement, either side can pull out after two years.

“It’s an innovative approach,” Southwest CEO Gary Kelly said. And one far more preferable to the way Tallahassee persuaded Delta to resume nonstop instate flights from there — by guaranteeing up to $2 million in tax dollars to the airline if it failed to fill enough seats and meet revenue targets.

St. Joe is putting its money — private funds — on the line. That’s as it should be. St. Joe was a driving force in relocating the airport to West Bay — it donated the land for the facility, and it owns 71,000 surrounding acres (as well as many, many more in the Panhandle). That’s land that will appreciate in value if the airport becomes an engine for economic development as its supporters have envisioned.

It is very much in St. Joe’s interest to see the airport succeed. Those chances improve with the addition of a low-cost carrier such as Southwest. Thus, it’s appropriate that the company get involved, and assume much of the risk, in bringing another airline here. [...]

Beckles
Oct 22, 09, 9:06 am
St. Joe will reimburse Southwest for any losses it incurs, but the developer also will earn a share of any profit the airline makes. Under the agreement, either side can pull out after two years.
I had posted the link to St. Joe's 8-K (http://www.sec.gov/Archives/edgar/data/745308/000129993309004137/htm_34733.htm) outlining details of the agreement, and I don't believe the newspaper has interpreted it correctly. St. Joe does not share in "any profit" the airline makes, they will only get reimbursed by Southwest to the extent they pay Southwest for losses and Southwest later makes a profit. Basically Southwest can't make a profit until St. Joe is breakeven on the deal. The absolute best St. Joe can do is breakeven on the deal, Southwest keeps all profits once St. Joe has broken even.

St. Joe can pull out after one or two years if the payments under the deal to Southwest exceed certain levels, and it appears WN can pull out at any time if revenue targets are not met.

They also mention Escambia County was to provide 45,000 room-nights to WN, the deal with PFN also includes free room-nights, though I don't know how many.

Edited to add:

Some more details in this Pensacola News Jorunal article (http://www.pnj.com/article/20091022/NEWS01/910220314), including that bed tax revenue is to provide $22.5 in marketing support for marketing, advertisement, and vacation packages and Coastal Vision 3000 is to provide a minimum of $20 million in free rooms to Southwest for vacation packages.

Get ready for some good vacation package deals to Northwest Florida!!!

lilj4425
Oct 22, 09, 11:38 am
This is all wonderful, but if WN is concentrating on business travelers (which is evident from their recent entries into LGA, BOS, MSP etc), why on earth would someone fly to GSP and then drive two hours to Charlotte? Sure, it works for the those who work for Michelin or BMW, but look at the corporate hq's in Charlotte: B of A, Wells Fargo/Wachovia, Goodrich, Loews (yeah, yeah, they're not technically in Charlotte), and so on.

Southwest will not be going to CLT due to proximity to Raleigh. CLT also already has JetBlue. ATL has Airtran. Southwest will go in between to gain market share from the upstate along with ATL/CLT metro areas. GSP has a metro population over 1 million which would easily support Southwest: http://www.greenvilleonline.com/article/20090930/BUSINESS/909300337/1004/news01 Independence Air proved this.

gsupstate
Oct 22, 09, 2:26 pm
Southwest will not be going to CLT due to proximity to Raleigh. CLT also already has JetBlue. ATL has Airtran. Southwest will go in between to gain market share from the upstate along with ATL/CLT metro areas. GSP has a metro population over 1 million which would easily support Southwest: http://www.greenvilleonline.com/article/20090930/BUSINESS/909300337/1004/news01 Independence Air proved this.

Besides, people Western N. Carolina and NE Georgia are already using GSP simply for convenience's sake and to avoid driving thru Atlanta (yes, driving around I-285 qualifies as driving thru Atlanta - it's just as busy or more than I-75/85) to get to ATL.

Beckles
Oct 22, 09, 2:36 pm
Southwest will not be going to CLT due to proximity to Raleigh. I don't know if and when WN will fly to CLT, but I don't think this has anything to do with why the don't, RDU and CLT are totally separate markets, they are 2-1/2 hour drive from each other, not many folks from CLT drive to RDU to fly and vice-versa.

There are quite a few cities WN serves that are a lot closer than 2-1/2 hours drive.

gsupstate
Oct 22, 09, 3:54 pm
I don't know if and when WN will fly to CLT, but I don't think this has anything to do with why the don't, RDU and CLT are totally separate markets, they are 2-1/2 hour drive from each other, not many folks from CLT drive to RDU to fly and vice-versa.

There are quite a few cities WN serves that are a lot closer than 2-1/2 hours drive.

Well, for now, we're all equal - no one between BHM and RDU has WN service. Time will tell.

LoneStarMike
Oct 26, 09, 5:53 am
From the Northwest Florida Daily News

St. Joe, Southwest Airlines and the coming boom (http://www.nwfdailynews.com/news/joe-21918-pat-reasons.html)

gsupstate
Oct 26, 09, 8:29 am
From the Northwest Florida Daily News

St. Joe, Southwest Airlines and the coming boom (http://www.nwfdailynews.com/news/joe-21918-pat-reasons.html)

Hopefully, if the economy turns around, and people start spending money on leisure travel and expensive 2nd homes again.

nsx
Oct 26, 09, 11:17 am
Hopefully, if the economy turns around, and people start spending money on leisure travel and expensive 2nd homes again.

Anybody buying an expensive second home far from high-paying jobs now would be making a mistake. Rental values move with local payrolls. Also, when the baby boomers retire, they will sell all those second homes they bought over the past decade or more. That would be the time to buy.

N830MH
Oct 27, 09, 9:07 pm
Hopefully, if the economy turns around, and people start spending money on leisure travel and expensive 2nd homes again.

Glad to hear it and it is improvement more recoverable the economy. So hopefully in 2010 if the economy will getting better for next year in 2010 timelines. Hopefully if they will retrieve the money back with those people due to losing the job or housing.

oopsz
Oct 28, 09, 12:14 am
Some more details in this Pensacola News Jorunal article (http://www.pnj.com/article/20091022/NEWS01/910220314), including that bed tax revenue is to provide $22.5 in marketing support for marketing, advertisement, and vacation packages and Coastal Vision 3000 is to provide a minimum of $20 million in free rooms to Southwest for vacation packages.

Get ready for some good vacation package deals to Northwest Florida!!!

Looking forward to it! I've been to destin and it's just beautiful, as long as you avoid spring break.

rtalk25
Oct 28, 09, 1:04 pm
Southwest will not be going to CLT due to proximity to Raleigh. CLT also already has JetBlue. ATL has Airtran. Southwest will go in between to gain market share from the upstate along with ATL/CLT metro areas. GSP has a metro population over 1 million which would easily support Southwest: http://www.greenvilleonline.com/article/20090930/BUSINESS/909300337/1004/news01 Independence Air proved this.

CLT also has AirTran, with a CLT-BWI nonstop, with connection to BOS. For CLT-PHL nonstop w/o connection in ATL, one remains at US mercy.

US will price match WN fares from PHL-RDU, then whatever loss of potential profit gets tacked on to the PHL-CLT and PHL-GSP fares.

rtalk25
Oct 28, 09, 1:31 pm
WN is getting a huge subsidy for PFN from St. Joe Co. That's why they're flying there. Do you honestly think they'd fly to PFN without that subsidy?

I'd think other desperate ventures should do similar. The Atlantic City casino owners subsidize the Atlantic City Express Amtrak between NY and AC. They should get LCC carriers on the BOS-ACY route (more than just NK), and maybe a WN flight from MDW-ACY. Even if PHL is too close for WN, the casinos could atleast get ppl who'd otherwise fly from PHL to stay in a hotel for one night in AC.

Myrtle Beach would be another example. I think these would be an alternative for ppl from the Northeast that just want a one-hour flight to destination over Vegas or Florida.

tigerpaw580
Nov 1, 09, 6:27 pm
Several facts haven't been mentioned here.One is the viability of using alternates by WN, BHM for those in W.Georgia, west side/west of Atlanta Metro, and those IN ATL who can't get a decent fare.All these people drive the easy 100 miles to the BHM airport.I have personally done it to get to DAL.Also, all points made by gsupstate are valid and the population would support GSP as a destination for AVL, CLT, or CAE. On to the topic at hand: there is a huge market for this area (Panama City west to Pensacola area).This area is a common destination for people from the midsouth all times of the year not to mention spring breakers.The St. Joe Company is not short of funds or sense as are WN's leaders and I doubt if they would enter into such an agreement without researching it thoroughly.Fares have been astronomical from VPS(Eglin AFB Valparaiso if you don't know) and PFN will change this I'm sure as well as the PNS fares.WN will probably also pick up some folks traveling out of TLH as they have the same current problems, high fares and RJ's/poor schedules . Looks like a win for WN and St. Joe.

gsupstate
Nov 2, 09, 6:59 am
I'd think other desperate ventures should do similar. The Atlantic City casino owners subsidize the Atlantic City Express Amtrak between NY and AC. They should get LCC carriers on the BOS-ACY route (more than just NK), and maybe a WN flight from MDW-ACY. Even if PHL is too close for WN, the casinos could atleast get ppl who'd otherwise fly from PHL to stay in a hotel for one night in AC.

Myrtle Beach would be another example. I think these would be an alternative for ppl from the Northeast that just want a one-hour flight to destination over Vegas or Florida.

I'd think both area population and current/future tourism markets in the Myrtle Beach area could easily support reliable, nationwide LCC service. It's already a golfing mecca nationwide, and otherwise is a major tourist destination.

curbcrusher
Nov 11, 09, 7:56 am
The new airport's name was changed yesterday to the Northwest Florida Beaches International Airport.

http://www.newsherald.com/common/printer/view.php?db=newsherald&id=78955

Airport receives new name -- yet again

PANAMA CITY -- The Airport Authority voted Tuesday to change the name of the new airport under construction near West Bay to the Northwest Florida Beaches International Airport.

The change, in a close 3-2 vote, came just a month after the board named the new airport the Northwest Florida-Panama City International Airport, a label that drew critical comments from some quarters because of the Panama City tag, officials said. [...]



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