Panama is enviably located at the heart of the Americas, and
has enjoyed sustained growth over the last decade. This growth
is due to the country's robust financial centre, free trade
zones and container ports, and the $5.25 billion expansion of
the Panama Canal. Consequently, Panama has emerged as a hotspot
for foreign investment.
Panama's aviation industry has faced significant changes in
recent years because of this economic expansion. The principle
airport in Panama City, Tocumen International Airport
(Tocumen), is currently undergoing its third phase of
expansion. This is part of an ambitious renovation programme
launched by the Panamanian government in 2006. With an
investment of $800 million, the third phase is scheduled to be
completed in 2017. Once the renovation is finished, the airport
will have 54 gates. Copa Airlines–the largest
Panamanian airline–expects its daily number of flights
to increase from 400 to 600 once the new terminal opens.
However, some have questioned the motivation behind
Tocumen's large-scale expansion in a region whose largest
nations suffer from crippling economic weakness. The answer is
that Panama enjoys an enviable geographical position compared
to its central and south American neighbours. As a result, many
of the world's top airlines have seen Panama as an attractive
hub from which to develop their expansion plans in Latin
America. Additionally, the strong and efficient operation of
Copa Airlines out of Tocumen, and the execution of many
code-sharing agreements between Copa Airlines and numerous
European, Latin American and Middle Eastern operators, have
facilitated the arrival of foreign airlines to Panama.
These geographical and economic advantages have been
integral to the strategic marketing campaigns put into place by
Panama's tourism ministry, as well as by Copa Airlines itself.
As a result of this partnership, Tocumen has become known as
the 'Hub of the Americas' in the aviation industry.
Another reason for the airport's success is the way it is
run. The innovative airport management platform was created
through Law No. 23 of January 29 2003, which constituted the
regulatory framework for the management of airports and landing
strips in Panama. This legislation allowed for the creation of
Tocumen, a Panamanian corporation whose shares are fully owned
by the Panamanian government. Tocumen's administrative
structure paved the way for the modernisation of the terminal.
Tocumen also has its own procurement law, which gives its board
of directors the authority to approve concession agreements.
Tocumen can manage its own procurement processes and issue
bonds or any other financial instrument to finance its
expansion programme. This structure has been efficient in terms
of decision-making and has added a degree of flexibility to the
Air transportation agreements
Panama´s legal framework has not been an obstacle to
the development of bilateral agreements in relation to
commercial aviation rights with other countries, or to the
access of foreign or national airlines to the Panamanian air
transportation market. Indeed, in 2016, the Civil Aviation
Authority of Panama (Autoridad de Aeronautica Civil
– the AAC) has already signed three cooperation
agreements involving aviation with Holland, Curacao and Aruba.
It is expected to sign another four with India, New Zealand,
Austria and Japan.
With respect to starting air operations in Panama, the
registration process with the AAC is simple and relatively
quick compared to other countries in the region. This is due to
the knowledge and professionalism of the AAC's staff.
The dynamic nature of Panama's aviation industry has been
the catalyst for the development of aviation law specialists in
some of the largest and most renowned law firms in Panama.
Having knowledgeable counsel is crucial to navigating the
regulatory requirements of the Panamanian aviation legal regime
and commencing air transportation operations.