Economic Optimism

 

 

 

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Economic Optimism

July 5, 2012

 

A St. Joe Co. guarantee against financial losses helped lure Southwest Airlines to the Northwest Florida Beaches International Airport.


It wasn’t required to make Southwest stay.


The two companies announced Monday that they were terminating the three-year agreement one year early. St. Joe, which initially was on the hook for up to $26 million in subsidies to offset Southwest losses, never paid a dime. The airline has found ECP to be profitable and never needed St. Joe’s help. In fact, not only has Southwest discarded the St. Joe crutch, it has extended its lease agreement with the airport through 2015.


Both moves demonstrate Southwest’s confidence in this Panhandle market. According to airport Executive Director John Wheat, the West Bay airport that competes with Tallahassee, Pensacola and Fort Walton Beach for passengers has grown its market share from 9 percent in 2009 (when planes were flying into the old midtown Panama City airport) to 25 percent this year. That places ECP second in the area, behind only Pensacola.


Southwest’s cutting the St. Joe strings refutes airport doom-and-gloomers who predicted that the airline needed the St. Joe subsidy to survive at West Bay, and that as soon as the agreement expired in 2013 Southwest would pack up and leave and the airport would be in dire straits trying to replace it.


Well, they still can mock the lack of international flights to the airport.


Also Monday, European aircraft manufacturer Airbus announced it would start building A320 passenger jets in Mobile, Ala. The manufacturing plant is expected to employ 1,000 people.
Obviously, it would have been fantastic had Airbus chosen a site closer to Bay County. Nevertheless, it likely will have a regional impact that will be felt in Northwest Florida. A thousand new, good-paying manufacturing jobs anywhere in the United States are cause for celebration these days, and to have them in our general neighborhood bodes well for the region.


Indeed, it could be the start of an “aerospace corridor” along Interstate 10 long envisioned by economic development officials. There’s plenty of land along I-10 in the Panhandle that would be suitable for large manufacturing, and a healthy ECP only makes it more attractive (as does a good seaport). If Airbus succeeds in Mobile, perhaps another manufacturer will take a closer look at setting up shop further east, much the way Mercedes-Benz, Honda, Hyundai and Toyota flocked to Alabama to build automobiles.


Neal Wade, executive director of Bay County’s Economic Development Alliance, knows a little about that — he was director of the Alabama Development Office for eight years in the early 2000s. He also was in Mobile for the Airbus announcement.


Southwest and Airbus aren’t cause for irrational exuberance. But these days, any good economic sign can make you feel a bit giddy.

 

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Bay Economic Development Alliance

5230 West Highway 98
Panama City FL 32401

Phone: 850.215.9965

E-mail: info@bayeda.com

 

 

 

 

5230 West Hwy 98,
Panama City FL 32401

Phone: 850.215.9965

E-mail: info@bayeda.com

 

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