By: Justin Bachman
It’s been more than 50 years since commercial flights from the U.S. could legally land in Cuba, and now domestic airlines have under two weeks to explain to federal regulators why they deserve to have a few of just 110 daily roundtrip flights to the island. The battle for Havana will be particularly fraught because the agreement to restore commercial flights includes only 20 slots in the capital.
American Airlines Group Inc., which flew 1,200 charters to Cuba last year, the most of any U.S. carrier, will request daily flights to the island from its hub in Miami. Delta Air Lines Inc. said this week it wants to fly to Havana but did not specify any U.S. departure cities. Those are the only publicly proposed scheduled services by U.S. carrier so far. JetBlue Airways Corp., which has built a “focus city” in Fort Lauderdale, Fla., is likely to request a flight from there and possibly one via Tampa and New York. United Continental Holdings Inc. may seek to fly from its hubs in Houston, Chicago, and Newark, N.J.
This process of gaining authority to fly from the U.S. to the 10 international airports in Cuba will culminate when federal officials dole out access based on an effort to “maximize public benefits,” the Department of Transportation said in its announcement this month. The return of commercial flights between the U.S. and Cuba, which could occur as soon as this summer, will remain restricted to one of 12 permitted activities—and tourism is not among them. To win a route, in other words, the carriers can’t press the public interest in Cuban beach vacations. The U.S. allows travel to Cuba (PDF) for such things as professional meetings, athletic competitions, religious activities, and humanitarian projects.
It's not clear whether carriers with established charter flights will have any advantage. JetBlue currently flies charters from three U.S. cities to Havana and Santa Clara, Cuba. “I think it’s safe to say that the Havana market application pool will be oversubscribed,” said Rob Land, JetBlue’s senior vice president of government affairs. It’s far less clear how much interest U.S. airlines will have in the nine additional Cuban cities that will now be open to them.
“In this case, you kind of have the land-rush mentality,” said Brad Hawkins, a spokesman for Southwest Airlines Co., which intends to apply for service to Cuba. That’s because nearly every U.S. carrier wants into Havana—but with only 20 daily flights, demand is likely to exceed supply. While Southwest recently opened an international terminal at Houston’s Hobby Airport, Hawkins declined to comment as to which routes to Cuba interest the company.
At least six major U.S. airlines have said they want to serve Cuba, including Spirit Airlines Inc., the ultra-low-cost carrier that also operates a focus city in Fort Lauderdale. Alaska Air Group Inc., which operates hubs in Seattle and Portland, is “currently evaluating whether this is the right opportunity,” said spokeswoman Bobbie Egan. A Virgin America Inc. spokesman said the California-based carrier had no comment as to whether it plans to apply.
The airlines must submit a detailed list of instructions with their proposals, including flight numbers, aircraft type, cargo capacity, what type of charter service a carrier now offers, and a ranking of which cities are most important to them. (A further rule of note: If an application is being submitted on paper, green ink is absolutely prohibited.) Regulators are likely to weigh the size of a city’s Cuban-American population, along with which routes are most conducive to business travel and other commercial engagement with the island. While so-called “VFR travel" (visiting friends and relatives) will be an important aspect in the awards, JetBlue's Land doesn't think that will be the sole criterion regulators use. “It’s more art than science, these proceedings,” he said.
After airlines submit their proposals, businesses and other parties will comment. One that will be active is Engage Cuba, a nonprofit group that lobbies to end the U.S. trade embargo and travel restrictions to Cuba. The group, which includes 30 companies and trade associations such as Choice Hotels International Inc., Comcast Corp., Delta, and Honeywell International Inc., wants airlines to choose routes that are commercially viable, said James Williams, Engage Cuba's president. “We don’t want them to be opening up an airline route and then shutting it down two months later,” he said. “We’re going to trust the airlines on that.”
Williams considers a flight from Delta’s largest hub in Atlanta critical because Georgia is the largest U.S. agricultural exporter to Cuba, reflecting demand for U.S. chickens and the legalization in 2000 of certain food exports to Cuba.
The DOT has long used a public-interest process to allocate access to airports with restrictions, although it has imposed an “accelerated schedule” for the Cuba flights. In past cases, the department has allotted U.S. airlines’ entrance to Tokyo’s closer international airport, Haneda, and it has doled out fiercely contested access for new players at New York’s LaGuardia Airport and at Reagan National Airport near Washington. Applications for commercial flights to Cuba are due by March 2, with public comments and airlines responses continuing until March 21.