In the second half of last year we saw the major U.S. airlines begin selling tickets for flights to Cuba. It’s no surprise that so many U.S. carriers requested rights to operate routes to Cuba, given that it’s the first time in decades that such flights are possible. I took advantage of that opportunity, and visited Havana in December. I had an… interesting time. I’m happy to have seen Havana, but don’t need to return anytime soon.
Challenges with making Cuba profitable
However, we’re going from one extreme to the other in terms of airline capacity. While there’s certainly interest among Americans in visiting Cuba, the actual demand isn’t there, at least not to fill the thousands of seats per day that are now operating between the U.S. and Cuba.
While there was a lot of enthusiasm at first, over the past couple of months we’ve heard a lot of airline executives say that they’re in Cuba for the long run, and they don’t plan on making money flying there in the foreseeable future.
In fairness, I suspect the performance on these routes varies significantly. For example, American may do reasonably well on flights between Miami and Havana, given that the flight covers a distance of just a couple of hundred miles, and they’re connecting big populations. On the other end of the spectrum, I can’t imagine how much money Alaska is losing on their daily Los Angeles to Havana flight.
Airlines have already cut capacity to Cuba
As I expected from the very beginning, we’ve already seen some airlines cut back capacity to Cuba. American started by downgrading the planes they operate on several routes, and then eventually even canceled three daily frequencies to Cuba. Then a bit over a month ago, JetBlue announced that they’re cutting capacity on all their Cuba routes, and downgrading planes on each of their routes — routes currently operated by A321s will be served by A320s, and routes currently served by A320s will be served by EMB190s.
Two airlines are pulling out of Cuba altogether
For the first time since service between the U.S. and Cuba began, two airlines are pulling out of Cuba altogether, citing weak demand. Specifically:
- Silver Airways will be discontinuing flights between Fort Lauderdale and Cuba as of April 22, 2017
- Frontier Airlines will be discontinuing flights between Miami and Havana as of June 4, 2017
Per the Miami Herald, here’s what the airlines had to say about the cuts:
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.
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.
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.
No surprises there! What’s interesting is that Silver Airways claims that demand to Cuba is in line with what they projected, but the market has about 300% more capacity than it should have. If that’s the case, I’m not sure why they started service there to begin with — the amount of capacity to Cuba should have come as no surprise, as we saw airlines petition the DOT for the right to fly to Cuba.
The cuts will continue. The only question is which airline is next.