In the News from Panama

China Airlines Preparing More Flights to Panama

In a move that could change Panama’s economic landscape, major Chinese airlines are preparing to dramatically boost air traffic to Panama City.

As part of the recent discussions between the two governments, the operators of China’s biggest airlines expressed interest in establishing 28 trips per week between China and Panama, according to coverage in La Prensa. That could mean four daily flights between Panama and China’s biggest cities, including Beijing and Shanghai.

As we’ve discussed, the new diplomatic relationship between Panama and China is a game changer for Panama City. China is a heavy investor in the economies of its partner countries, and they provide a direct boost to tourism and real estate sales. Around the world, Chinese investors are active in property, one of the favored asset classes.

When China starts to increase air traffic, Panama may have to expand Tocumen International Airport, even beyond the current expansion scheduled to open next year. “You have to think of 2035 when, most likely, it will be necessary to have a third terminal,” Peter Cerda, the regional vice president of the America for the International Air Transport Association, said at a recent conference.

A recent report from IATA said that 14 percent of Panama’s GDP is generated by the aviation sector, which could increase as more flights from China and Asia start arriving in Panama City.

Alfredo Fonseca Mora, director of Panama Civil Aeronautics Authority, told Prensa he expects the air deals to be approved without issue, perhaps as early as November, when Pres. Juan Carlos Varela is scheduled to visit China.

More than 136 million Chinese traveled in 2016, but travel experts believe that is simply a drop in the bucket. Global travel is still a relatively new phenomenon in China; the vast majority of Chinese have never left the country.

Duncan McGowan is president of Punta Pacifica Realty, a Panama real estate agency Duncanfocused on Punta Pacifica, the exclusive neighborhood of 18 towers perched on the edge of the Pacific Ocean.