Case Study

Name: Panama City-Bay County Airport and Industrial District, Panama City, Florida Date: 1999 – present Project: Financial and Air Service Marketing Advisory Services

Summary: IMG conducted a financial feasibility analysis of relocating the Panama City-Bay County Airport to a greenfield site and is currently serving as financial advisor on the $250 million financing. This effort includes supporting the Airport’s effort to package and sell its existing property that will be used in funding the greenfield facility. IMG has also provided air service marketing support.

Issue: Due to space and environmental constraints, the Panama City-Bay County International Airport cannot expand to meet increasing demand. The Airport has proposed relocating from its 700 acre site to a new location of approximately 4,000 acres and closing the existing airport. As part of a team led by Bechtel Infrastructure, IMG was hired by the Airport to conduct a financial feasibility analysis for this Airport, assuming approximately 200,000 enplaned passengers and maintaining competitive airline rates and charges.

In addition, the Airport sought IMG’s help in identifying air carriers that best fit the Airport’s profile and in initiating discussions with them to serve the Airport at its current and/or new location.

Solution: IMG has developed a financial plan for the new Airport that includes FAA and State of Florida grants, proceeds from the sale of the existing airport property, a bond issuance leveraging an FAA letter of intent (LOI), a general airport revenue bond supported by airport revenues and passenger facilities charges (PFCs), and other sources of innovative finance, including the donation of land from a private developer. IMG is also helping the Airport value and structure the sale of the existing airport property. Finally, IMG is assisting the Airport reach financial close within the 2005-2006 timeframe, which includes working with the airport’s underwriters, counsel, and other financial intermediaries.

In its air service market analysis, IMG identified over ten potential air carriers and new routes for the Airport. Discussions with air carriers have led to upgrades and expansion of service from existing carriers and positive indications that new carriers will serve the relocated airport.

Value Created: The financial plan for the relocated airport is balanced among federal and state grants, airport revenues, property disposition sources, and private land donations. It will result in a cost per enplaned passenger that is competitive with regional airports in the Southeast.