U.S. Airlines Play the Waiting Game in Cuba
The new restrictions imposed by the Trump administration this week on travel from the U.S. to Cuba could end up compelling airlines to recalibrate service to the island.
"Overall there are simply going to be fewer people traveling to Cuba, and there will be fewer seats needed, fewer aircraft needed, so you're going to see continuing adjustments of aircraft size and scheduling," said John Kavulich, president of the U.S.-Cuba Trade and Economic Council.
According to OAG data, airlines have had relatively consistent U.S.-Cuba bookings of between 130,000 and 170,000 one-way passengers per month since September 2017, following higher numbers during the first year after commercial flights were authorized in late 2016.
Recent months have trended upward year-over-year. For example, in March (the most recent month for which OAG provided data) travelers flew 173,000 flight legs between the U.S. and Cuba compared with 148,000 a year earlier.
That trend could reverse following the Treasury Department's decision on Tuesday to put an end to the cultural trips between the U.S. and Cuba categorized as people-to-people travel.
According to Transportation Department figures provided by Kavulich, 893,000 passengers flew from the U.S. to Cuba in 2018. Meanwhile, 586,000 people of Cuban descent visited the island nation in 2018, according to Cuba's tourism ministry. Most arrived from the U.S and stayed with relatives or friends.
Working under the supposition that most of those people traveled to Cuba via air, Kavulich estimates that around 300,000 American tourists flew to Cuba last year. Of those, almost all would have been traveling under the people-to-people exemption (which the Trump administration has now nixed) or the "support for Cuban people" exemption, which still exists.
Tour operators have been saying that they can continue to offer trips to U.S. citizens under the "support for Cuban people" exemption.
For now, airlines say they will wait and see how the people-to-people ban affects demand.
"We are reviewing the revised regulations to determine what the changes mean for our operations and our customers," JetBlue spokesman Philip Stewart said in an email Wednesday. JetBlue flies the second-most passengers between the U.S. and Cuba. American Airlines, the largest carrier in the market, had a similar message.
The five U.S. carriers that serve Cuba already concentrate the bulk of their departures in Florida, where most of the approximately 2 million Cuban-Americans reside. Those routes are mostly flown by Cubans who are visiting friends and family.
Also, United flies to Havana from Houston and Newark, JetBlue flies to Havana from New York JFK and Boston, and Delta serves Havana from Atlanta.
Kavulich noted that United's Newark route serves northern New Jersey, where the second-largest concentration of Cuban-Americans live. The other non-Florida routes are more leisure-focused and could end up with capacity reductions or a suspension of service, he said.
He added that airlines could choose to shift more of their Cuba capacity to Florida as they exit other markets.
Still, much remains to be learned about how this week's changes will impact U.S.-Cuba flight schedules. With Cuba cruises no longer permitted from the U.S., hundreds of thousands of Americans who had been visiting Cuba by sea can now only make the journey via air. But will they?
Cuba Candela CEO Chad Olin said he expects his air-reliant tour operations to gain business.
"It's possible that the 300,000 people who were visiting Cuba on a cruise will now fly and will go to Cuba on a stayover," he said. "So, it's possible that flights could increase."
Source: Travel Weekly