Is There Competition in the Air?

Experts don’t expect Panama City’s  new ‘international’ airport to siphon business from Tallahassee 

By Jason Dehart
Photo Illustration by Saige Roberts

Someday the Panama City-Bay County International Airport may be able to fly passengers nonstop to destinations such as Germany and Britain. With a new location and longer runways, it certainly is headed in that direction.

The official groundbreaking for the new airport was Nov. 1. Gov. Charlie Crist praised the airport as “a national model for economic transformation and environmental preservation,” alluding to the 40,000-acre West Bay Preservation Area inside which the facility will be located.

Site preparation hit a snag in late November with news that a Federal appeals court issued an order temporarily stopping the development in its tracks. Opponents of the new airport sought to reverse the Federal Aviation Administration’s decision last fall to start construction.

At press time a hearing had been tentatively set for mid-December. Randy Curtis, executive director of the Panama City-Bay County International Airport, said this was just one last hurdle to overcome and was confident that the new airport would be built.

“We will continue to move forward,” he said.

When it is built in about three years, Panama City’s airport actually will be similar to Tallahassee Regional Airport. Earlier news reports of a new facility with a size, scale and service rivaling that of Tampa International Airport were greatly exaggerated. However, it holds great promise for local globe-trotting vacationers.

“I do think there will be nonstop flights to Europe,” said Joe Tannehill Sr., chairman of the Panama-City Bay County Airport and Industrial District, better known as the Airport Authority.

“I’d say we’re looking five to seven years before that happens. But we’ll be marketing that aspect of it heavily in another year. These things take salesmanship and getting in front of prospective customers.”

But officials say the new airport may not have much effect on its nearest “competitor” in Tallahassee.

“Will the new airport impact Tallahassee? We serve two very different markets,” said Kenneth Austin, director of aviation at Tallahassee Regional Airport. “Panama City is a leisure market, and Tallahassee is a business market.”

“Panama City is primarily based on leisure travel, tourism and the military, whereas Tallahassee supports governmental and educational activities,” Tannehill said. “Approximately two-thirds of the existing passenger market today is leisure travelers that travel to and from the Panama City area for vacation or own second homes or condos in this area. In addition, the airport serves military personnel associated with the Air Force and Navy facilities in Bay County, as well as civilian defense contractors.”

Austin said Tallahassee’s airport isn’t suffering for business. Quite the opposite.

“Because we have a base of state government, the two universities and the community college, we’re going to have steady air service in Tallahassee,” he said, with people coming in and going out of the city to conduct business.

Tallahassee currently is serviced by four carriers, and close to 100 flights a day leave Tallahassee. The airport also has shipping services DHL and Federal Express – the latter of which is in the process of building a larger facility. In addition, the airport is home to HondaJet Southeast – a new business jet dealership – and DayJet, touted as the world’s first per-seat, on-demand small jet service. A hotel also is coming to the airport courtesy of Compass Pointe, a new aviation center.

“We have a very positive outlook for the aviation industry in Tallahassee,” Austin said.

However, Tannehill said there always will be some competition between the two airports. Whichever airport is more convenient and offers the better prices will get the business, he said.

“It is our belief that both airports will help each other by providing a higher level of competition among the aviation service providers,” Tannehill said. “It is ultimately the traveling public that will benefit the greatest.”

Officials in the region also are hoping the better air service that will come with a new airport will boost economic development efforts.

“Transportation is the lifeblood of so many businesses,” said Bay County Economic Development Executive Director Ted Clem. “Having (a new airport in a new location) puts us in a very strong competitive position to attract new business and new jobs.”

“The new airport will open a skyway between Northwest Florida and the world,” said state Sen. Don Gaetz, R-Niceville. “We will become a point of origin and a destination for international as well as regional flights. Certainly our tourism and second home industry will benefit. Even more important, the nationwide and international reach of the airport will help us compete for new businesses bringing higher-paying jobs.”

The Nuts and Bolts
The upcoming Panama City-Bay County International Airport is located on a 4,000-acre tract of land with a primary runway 8,400 feet long that can be extended to 12,000 feet. General aviation aircraft will have a 5,000-foot crosswind runway. Long-term plans call for another 8,400-foot parallel runway. The terminal will, at first, be 105,000 square feet in size. About 100 other ancillary buildings and facilities are planned, including a public safety building, a fixed-base operations terminal, and corporate and private hangars.

By comparison, Tallahassee Regional Airport sits on 2,743 acres with 8,000-foot and 6,070-foot runways. At 203,400 square feet, the Tallahassee terminal is twice the size of the one planned for Panama City.

“Not only will this airport be used by commercial airlines, it will be served by a broad range of private and corporate general-aviation aircraft,” Tannehill said. “In fact, this has been one of the fastest-growing segments of the aviation users of the airport today.”

Five major airlines serve the existing airport, and Tannehill said all have indicated their desire to relocate to the new airport with expanded facilities.

“New carriers have also expressed interest in the new airport, and some have participated in the design process,” he said. Since it is a highly competitive business, the identities of those airlines won’t be released until later, but Tannehill said there is a distinct possibility that value-priced airlines such as ValuJet will move in.

“ValuJet, in the Atlanta paper, said they would be interested in coming to Panama City with the new airport,” he said.

Currently, the older airport is “international” in name only, thanks to its shorter runways.

“The present-day reality is we are a commuter airport, with small commuter planes,” Tannehill said. “As years go on, we lose more and more of the flights we do have; basically, we’re dying in commercial air traffic. The current airport is too small, and it’s not economical for the bigger guys to come in here.”

The current airport offers nonstop service to four large domestic cities: Atlanta, Memphis, Tenn., Orlando and Cincinnati. Much like Tallahassee Regional Airport, travelers from the Panama City area can make connecting flights to any destination in the world. But the longer runways of the new airport will give it the capability to process truly international flights.

“This is based on primarily serving international charter flights for the tourism industry,” Tannehill said. “Our runway will be long enough to handle bigger planes, and it will have all the customs and all the things you need for foreign travelers and U.S. travelers flying back into the U.S.”

Tannehill said building the airport is all about economics.

“This is a matter of money for everybody – a matter of money for the carriers and the flying public,” he said. “We have 12,000 to 15,000 people who would use the airport if our airport was competitive, and we are not. We are the highest-fare airport in Florida. That’s because we’ve been relegated to commuter-size airplanes in here, and that’s not what our economic engine needs – especially for the growth we’re going to have in the next 20 years.”

Initial site work at the airport is expected to be under way by the first of the year. Paving of runways and taxiways will start in the summer. By then, the design of the terminal building also will have been completed, as well as other airport building facilities.

Location, Location, Location
The Airport Authority has been working toward having a new airport for nearly 10 years. In the late 1980s, it took steps to address significant deficiencies in the current airport, including non-standard runway safety areas, which did not meet FAA safety standards. Another issue that drew criticism was a plan formulated in the mid-1990s to extend the current runway system into Goose Bayou, an environmentally sensitive part of St. Andrews Bay. Faced with concerns voiced by local environmentalists and the Florida Department of Environmental Protection, the Airport Authority decided to move the airport to a new location.

The $300-million airport will be built in western Bay County north of County Road 388 and east of State Road 79 on land donated by the St. Joe Company, the largest private landholder in Florida. Construction funds are being provided by the Airport Authority, the Florida Department of Transportation and the Federal Aviation Administration. The new airport is part of a 75,000-acre preservation/development plan called the West Bay Area Sector Plan. Of that 75,000 acres, about 41,000 are expected to be set aside for environmental protection, leaving the balance open to development over the next 20 years.

“The sector plan is an innovative land use plan that incorporates commercial, industrial, residential and conservation land uses in such a manner as to support and enhance the airport operations,” Tannehill said.

Sector planning is a new form of development enacted by the Florida Legislature in 1998. Its goal was to address concerns about growing urban sprawl. Unlike a traditional form of development such as a development of regional impact (DRI), a sector plan takes a broader, longer-term view of a geographic area and includes detailed, specific area plans within the sector development.

In a statement released in the summer of 2007, St. Joe Company Chairman and CEO Peter S. Rummel said Bay County has a “once-in-a-lifetime opportunity” to chart its future for years to come, thanks to the innovative new sector plan.

“The relocation of the airport creates a platform to attract better air service and new jobs – and remarkably, it also makes the permanent protection of West Bay possible,” he said.

“Mother Nature is the best place-maker of all time, and now we will be protecting forever some of her best work.

“It will offer unique opportunities to locate business operations near a new state-of-the-art international airport designed for 24/7 operations with protected approaches,” Rummel said at the time of the groundbreaking. “With a link to Panama City’s deepwater port, we believe this airport has significant unique competitive advantages and St. Joe is positioned to work with dynamic third-party developers and end-users to be operational when the new airport opens.”