U.S.-Cuba policy looms at aviation industry conference



CANCUN, June 6 (Reuters) - Less than a year after passenger flights restarted between the United States and Cuba, the future of Cuban travel is once again up in the air.

Aviation sector leaders gathered in Cancun, Mexico said they are concerned that President Donald Trump may reinstate some political and economic restrictions between the two Cold War-era foes.

The Trump administration is reviewing the Obama administration's moves to ease restrictions on travel and investment in Cuba. Trump has criticized the agreements by Obama to thaw relations with the Cuban government.

Airlines, facing uncertainty about a U.S. policy that could make moot millions in recent investments, are loath to criticize the Trump administration's unpredictability, but the industry is unified in saying the thaw should continue.

"Restricting the network of aviation and access to Cuba would be bad news for aviation. Generally we welcome the extension of access to any country by plane," IATA Director General Alexandre de Juniac told reporters ahead of the June 4-6 conference.

The initial opening prompted a dash to launch flights into Cuba in mid-2016. Some of the early entrants have pulled out, including smaller carriers Frontier Airlines, Silver Airways and Spirit Airlines.

Larger U.S. carriers have pared back flights to smaller Cuban cities to focus on service to the capital, Havana.

American Airlines, Delta Air Lines, United Airlines, Southwest Airlines and JetBlue have all requested increased frequency on various Havana routes. Those requests are in limbo pending the administration's review.

U.S. cruise operators and airlines stand to lose around $712 million in annual revenues if the Trump administration fully reinstates restrictions on travel to Cuba, Washington lobby group Engage Cuba said in a report last week.

When the application process first opened in 2016, an arrangement between the two governments allowed for 20 daily flights to Havana. Cuba reported 4 million arrivals last year, of which 285,000 were Americans. Another 300,000 Cuban Americans visited but are not considered tourists.


Eased travel restrictions have already dramatically reshaped Cuba's tourism scene, including the Nacional Hotel, which overlooks the Gulf of Mexico and entry to Havana Bay.

Tourists now flood the back veranda of the iconic mammoth structure, paying triple the prices and spilling out of the previously half-empty space.

Cruise ships, once a rarity in the Bay, now dot the shoreline, and Americans are no longer an unusual sight among visitors.

Meleny, a state tour guide, who asked her last name not be used, says she worries about Trump every night.

"We will see what he does, but it would be a shame if he drops a bomb on all this. This job isn't great, but the Americans are good tippers and that is how I feed my kids and buy them shoes," she said.

American visitors to Cuba could increase as much as seven-fold by 2025, according to a report by the Boston Consulting Group. Given tourism infrastructure is already creaking, that means there are business opportunities aplenty but U.S companies must learn to navigate a centrally-planned economy.

The United States still officially prohibits its citizens from visiting Cuba as tourists. However, travel between the two countries is easier now than it has been in more than half a century thanks to exceptions to that ban, which allow travelers to claim they are visiting family or engaging in business, cultural, religious or educational activities.

In a tweet shortly after his November election win, Trump threatened to "terminate" the relationship unless the Cuban government agreed to a number of political concessions. The administration could announce its review's findings as early as this month.

Business industry leaders, particularly in the airline and travel industry, have been fearful of a repeal of Obama-era policies, appealing to Trump's pledge to keep "America First" by allowing continued business with the Caribbean island.

Airlines have praised the opening of the travel market, under which general tourism is still restricted but a number of visa options exist for those seeking to visit the island.

"The Caribbean is so core to JetBlue that we see Cuba as very important to us, longer term," JetBlue, which has twice requested and been denied a Boston to Havana route, CEO Robin Hayes told Reuters.

Cuba continues to present many opportunities in the near- and long-term, said Peter Cerda, IATA regional VP for the Americas.

"IATA has been working closely with the authorities in Cuba to launch a (billing and settlement plan), which will help with the selling of tickets to Cuban citizens within the timeframe of 2017."