Cuba deal will allow 110 daily flights; Will airline bidding battle follow?
U.S. carriers will be permitted to add as many as 110 daily round-trip flights between the United States and Cuba, The Associated Press reports.
But only 20 of those will be to Havana, a destination that most big U.S. carriers have expressed an interested in serving. That 20-flight cap could led to a competitive bidding process for access to the Havana flights, depending on how many airlines seek those rights.
The flight count is one of first concrete details to emerge from the new U.S.-Cuba agreement that will allow airlines to add regular passenger service between the nations.
Beyond the 20 flights allocated for Havana, there will be up to 10 each allowed on routes to Cuba's nine other international airports, Thomas Engle – the United States’ deputy assistant secretary for transportation affairs – tells Reuters.
U.S. airlines: Cuba, here we come
The newly allowed regular passenger flights would be in addition to the charter flights that are already operating between the USA and Cuba. There are currently about a dozen such flights to Havana as well as several charters to other Cuban cities, according to Engle.
Engle tells AP the U.S.-Cuba aviation deal did not anticipate any flights to the United States by Cubana, Cuba’s state-owned national carrier.
"Once the arrangement is formally signed, DOT will invite applications from U.S. carriers interested in launching new scheduled service to Cuba and conduct a selection proceeding to evaluate the proposals that will offer and maintain the best service," Susan Kurland, Assistant Secretary for Aviation and International Affairs at the U.S. DOT, says in a statement.
Given the limited number of Havana slots, it is possible that U.S. carriers will wage aggressive campaigns to win those rights.
China and Japan have been among the most coveted restricted markets during the past two decades, with U.S. airlines aggressively bidding on high-profile new routes as they've become available to places like Tokyo, Shanghai and Beijing. And, during the past year, relations between American and Delta have even become testy as those carriers have argued about the rights for a daily round-trip to Tokyo’s Haneda Airport.
The DOT eventually transferred the rights for that route from Delta to American after American argued Delta was underutilizing its rights, flying a Seattle-Haneda route infrequently but just enough to keep the route from being classified as “dormant.” The route was subsequently awarded to American, which now intends to use the rights to fly to Haneda from Los Angeles. Despite that, Delta and American continue to snipe at each other over the coveted flight rights.
That type of heated competition could emerge for the new flights that will soon be allowed to Cuba. Nearly every big airline presumably will want access to Havana, but the 20 daily flights could get chewed up quickly – especially if airlines hope to offer more than one round-trip a day from more than one of their hubs.
American and JetBlue have been among the most outspoken in the desire to begin regular flights to Cuba, though most big carriers say they’re interested in doing so. American and JetBlue each indicated on Thursday that they're looking at adding multiple routes to Cuba.
In an example of how quickly the new flight rights could get snapped up, American alone would account for 20% of the entire allotment of Havana flights if it were to add service from its hubs in New York, Miami, Dallas/Fort Worth and Chicago O'Hare with just one daily flight. Adding additional daily flights on any of those routes would only chew up more of the available flights.
Spread that out over all the other airlines hoping to fly to Cuba, and it's possible that the new flights -- notably the 20 carved out for Havana -- will disappear quickly. If the bidding process works like it has to other historically restricted markets, the DOT could have its hands full in deciding how to divvy up the Havana flights.
Beyond Havana, it remains to be seen how much demand there will be from U.S. airlines for the flights to the other nine airports, which include destinations like Varadero, Camagüey and Holguin. At least one of those destinations has proven popular with other international airlines; the beach resort area around Varadero already has regularly scheduled flights from carriers such as Air Berlin, Air Canada, German carrier Condor and Canada's WestJet.
How soon could U.S. airlines begin flying the newly available Cuba routes? Reuters writes that "a group that promotes U.S.-Cuba trade said there was a 60-to-90 day process during which U.S.-based air carriers will submit proposed routes, suggesting scheduled flights would not begin until the first few months of 2016 at the earliest."
Stay tuned ...