PANAMA CITY

The U.S. Department of Transpiration has awarded the Panama City-Bay County International Airport a $575,000 grant to bring in a low-cost carrier and help current airlines expand their service.

The federal dollars will be matched with $529,500 in cash and in-kind contributions from the local business community. According to federal guidelines, the funds can be used for marketing, research and subsidies to carriers.

“The ultimate intent is … improvement in airline service,” said Randy Curtis, the executive director of the airport.

Currently, the airport, which is being relocated to a 4,000-acre site near West Bay, has two carriers: Atlantic Southeast Airlines and Northwest Airlines.

Airport officials asked for $1 million in their grant application, Curtis said. However, the Panama City airport was the only one in Florida to receive funds from the grant program.

About 75 other airports applied for grant money from the $10 million pot, DOT officials said. Last year, the department awarded 25 grants totaling about $9.7 million.

The grant is “great for the community,” said Carol Roberts, president and CEO of the Bay County Chamber of Commerce.

If the airport is able to bring in another carrier “it will force others to become competitive, too,” she added.

Curtis said the grant also would be used to expand service and add seating capacity.

“Really, the impact on fares would come from providing greater competition,” Curtis said. The airport has been in talks with U.S. Airways, Continental and American Airlines, he added.

“U.S. Airways has a hub in Charlotte that could be an alternative to going through Atlanta,” Curtis said.