Pages

Tuesday, March 14, 2017

Weak demand prompts two U.S. airlines to cancel Cuba service

Weak demand prompts two U.S. airlines to cancel Cuba service
BY MIMI WHITEFIELD
mwhitefield@miamiherald.com

The shake-up continues in the Cuba travel business with two U.S.
airlines announcing Monday that they planned to cancel their routes to
the island.

Fort Lauderdale-based Silver Airways said it had made "the difficult but
necessary" decision to suspend all its Cuba service on April 22. It had
originally hoped to serve all nine of the Cuban cities outside Havana
that the U.S. Department of Transportation had authorized for regularly
scheduled flights from the United States to Cuba.

Frontier is canceling its Miami-Havana route on June 4 due to higher
than anticipated costs and lower than expected demand. "Market
conditions have failed to materialize there, and excess capacity has
been allocated to the Florida-Cuba market," the airline said in a statement.

Frontier launched its service to Cuba on Dec. 1 with a special
introductory one-way fare of $59 on the Miami-Havana route. The low-cost
carrier had planned its daily flights to and from Havana so that
Frontier passengers coming from Denver and Las Vegas could make easy
one-stop connections in Miami.

The Denver-based airline noted that more than 80 percent of its "new
routes have succeeded over the past few years, yet circumstances
sometimes prevent us from achieving our objectives."

Last year there was a mad scramble as U.S. airlines applied to DOT for
the first flight frequencies to Cuba in more than half a century. Part
of the enthusiasm was based on the assumption that the travel opening
that began under former President Barack Obama would continue.

But U.S. travelers still can only visit the island if they fall into 12
specific categories of travel such as family visits and those making
people-to-people, humanitarian or educational trips. U.S. travel to the
island is supposed to be purposeful, ruling out vacations baking on the
beach like Canadian and European tourists.

President Donald Trump also has ordered a review of all Obama's
executive orders on Cuba, leaving the future of his Cuba policy still up
in the air. Some of the forbidden-fruit, pent-up-demand aspect of Cuba
travel that was so much in evidence in 2015 and 2016 has faded, too.

"This lack of demand coupled with overcapacity by the larger airlines
has made the Cuban routes unprofitable for all carriers," Silver said in
statement.

JetBlue recently decided to put smaller planes on its Cuba routes, and
in mid-February American Airlines cut its daily flights to Cuba from 13
to 10. Silver, which flies out of Fort Lauderdale-Hollywood
International Airport, had already reduced frequencies on some of its
Cuba routes before it decided to throw in the towel.

Silver Airways was granted flight frequencies to nine Cuban cities
outside Havana and it had begun serving all but the airport in Cayo
Largo, which the Transportation Security Administration hasn't approved
for operations from the United States.

"Silver has maintained from the beginning that these smaller Cuba
markets — which are similar to its successful network and fleet strategy
in Florida and the Bahamas — are best suited for Silver's smaller
aircraft type," the airline said.

Silver has been using 34-seat aircraft on its Cuba routes. But some of
its recent flights from Fort Lauderdale to Varadero have been carrying
just two or three passengers, according to Cuban Customs reports.

"While the actual total number of passengers currently traveling to and
from Cuba on all carriers combined is in line with what Silver
originally projected, other airlines continue to serve this market with
too many flights and oversized aircraft, which has led to an increase in
capacity of approximately 300 percent between the U.S. and Cuba," Silver
said.

But Silver plans to continue monitoring Cuba routes and "will consider
resuming service in the future if the commercial environment changes."

FOLLOW MIMI WHITEFIELD ON TWITTER: @HERALDMIMI

Source: Frontier and Silver Airways to eliminate Cuba routes | Miami
Herald - http://www.miamiherald.com/news/business/article138231698.html
Post a Comment