Winners and Looser in the Air Travel to Cuba

cheap flghts to CubaHAVANA, July 12th Last week, the U.S. Department of Transportation announced which airlines would be awarded the 20 daily flight slots to Havana.

Who got the 20 most coveted U.S.-Cuba slots?

Everyone did.

Eight carriers given the chance to compete in Havana
In all, eight US carriers were awarded flights to Cuba’s capital city. This was not a surprising decision given how the DOT allotted the 90 slots for Cuba’s other cities. On these “other” routes, even smaller airlines like Silver and Sun Country were given a chance.

The same approach – giving everyone a chance to compete – was evident when the Havana routes were awarded. Some airlines are probably happy with this approach, but others will be disappointed.

American Airlines: biggest winner and biggest loser?
American Airlines could easily be called the biggest winner AND the biggest loser of the U.S.-Havana route allotment. The airline had asked for 10 daily slots for Miami-Havana flights, arguing that there was enough demand given the large Cuban-American population in the city.

AA was only given four slots on the route. Because of the Cuban-American population in the South Florida city these will probably still turn out to be among the most lucrative of the 20 flights.

American was also given one daily Havana flight out of Charlotte. This is important for the airline because its growing North Carolina hub serves 70 destinations that are not connected with Miami. This means that a majority of American’s fliers (who are not in Charlotte or Miami) are only one stop from the Cuban capital.

DOT wants competition on high-demand routes
In addition to getting four slots instead of 10, American will have to compete directly with Delta and Frontier, who were both given a single daily Miami-Havana flight. This competition should help keep fares reasonable. In fact, that is probably why the DOT, which has said that it would award routes that it thought were most beneficial to fliers, chose to give three airlines Miami flights.

Low-cost carriers flying from Fort Lauderdale

Low-cost carriers will operate six additional Havana-South Florida flights from Hollywood-Fort Lauderdale International.  Southwest, Spirit and JetBlue will all operate two daily flights to Havana out of the airport. (JetBlue will only have one Saturday flight to make way for United’s weekly Houston-Havana service).

Again, the idea seems to be to have more than one airline serving the most popular routes to create fare-decreasing competition.

The same is true in New York, with JetBlue and Delta flying to Havana from JFK and United flying daily from Newark.

Other hub cities could provide convenient connections

The DOT gave the nod to nine cities in total. The idea for these lower-demand cities, like Charlotte, seems to be to give airlines the chance to connect to Havana from one of their hubs so that most people in the United States would be only one connection away from Havana.

For example, Delta Air Lines has a daily flight from Atlanta, and Alaska Airlines has the sole West Coast-Havana service with daily service from Los Angeles. (This was a big win for Alaska, even though demand is low on the route, there will no direct competition).

Finally, both Tampa and Orlando have one daily flight each, on Southwest and JetBlue respectively. This means that tourists and Cuban Americans in these cities can fly directly to the island without having to make a pit stop in Miami.

Enough demand for 20 daily flights?

So it seems like the DOT is trying to make everyone happy, especially fliers. There seems to be enough competition on the biggest routes to keep fares relatively reasonable, and every major airline is at least getting a shot at flying to Havana.

The question is: will there be enough demand on all 20 routes? Cuban Americans and Florida-based businesspeople with connections to Havana will be the largest groups headed to Cuba, but are the 14 daily Florida flights overkill given that there are still plenty of restrictions on Americans traveling in Cuba?

The real competition will start after the novelty wears off

After the initial surge of interest in flights to Havana drops off, the competition will really start. The Fort Lauderdale Three — Spirit, Southwest and JetBlue — could try to compete by offering connecting flights that are cheaper than direct flights from other non-Florida destinations. For example, Flying JetBlue from Los Angeles to Havana via Fort Lauderdale could be cheaper than Alaska’s direct LA-Havana flight. Or Southwest could try to undercut United by offering Houston-Fort Lauderdale-Havana flights for less than United’s direct Houston-Havana service.

Airlines will now have a chance to appeal the DOT’s decisions. The deadline for doing this is July 22. After this process, the routes will be made official (sometime in August). Because of the way the slots have been allotted, with competition built into major routes and hub cities offering convenient one-stop trips for most Americans, changes are not likely even if an airline does launch an appeal.