Wednesday, October 21, 2009

St Joe Guarantees SW Break Even

from a Dallas newspaper blog:

Gary Kelly just said it'll be its 69th city. So there you go. Close blog readers knew ahead of time, so that's your reward if you're reading us closely. May is the start for eight daily flights spread among four cities to be named later.

"I kind of feel like Oprah," Gary says, as he tells the news to an internet connection to the folks there in Florida.

"We have been overwhelmed by the amount of energy that Panhandle residents have put on Southwest Airlines to start service to that area," he said.

I've got to believe there's a very large incentive package coming to Southwest for this brand-new airport. Press release cites local tourism groups as part of the incentives.

There's a twist: They're doing a "strategic partnership" with the St. Joe Co. where the St. Joe Co. ensures that Southwest will break even on the service for the first three years. Very interesting. The risk was too high, Kelly said, since there's no history there. St. Joe Co. - a huge real estate entity in Florida -- will make up any differences to keep the service there. So they're basically buying the service, to some degree. Interesting.

The agreement gives St. Joe an out after 2 years if things are bad: Southwest can exit too under certain circumstances. "It's an innovative approach," Kelly said.
in reference to: The News Herald (view on Google Sidewiki)

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