Saturday, June 18, 2016

FedEx Downsizes Cuba Ambitions in Amended Flight Request

FedEx Downsizes Cuba Ambitions in Amended Flight Request
Express airline drops Miami-Havana cargo application for Miami-Veradero
route using turboprop plane
June 17, 2016 3:06 p.m. ET

FedEx Corp. won't be flying a big cargo plane into Havana anytime soon.

The express delivery giant dropped its bid to operate to Cuba's capital
and is now requesting U.S. regulatory clearance to fly five times a week
between Miami and the smaller resort town of Veradero in the province of

In a downsizing of its near-term ambitions, the company also said it
would use a Cessna 208 aircraft, which is far smaller than the Boeing
757 it initially proposed for the Miami-Havana route.

Using Varadero as the base for FedEx's initial operations "would be the
more optimal use of its resources under current Cuba marketplace
conditions," it added in the amended application.

A company spokeswoman declined Friday to elaborate on those market
conditions or the reason behind the changes. The company reiterated its
``strong interest'' in providing all-cargo transportation service
between the countries.


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The decision comes amid heated competition for U.S. passenger flight
routes to Havana. The Transportation Department last week awarded six
U.S. airlines rights to secondary Cuban airports but said it would wait
until the summer to apportion flights to the capital after receiving
three times more requests than the 20 available daily slots.

FedEx said Friday it plans to provide trucking service from Varadero to
Havana, the special development zone in Mariel and Santiago de Cuba.
Veradero's Juan Gualberto Gomez International Airport is roughly 70
miles east of Havana.

The company requested a start date of Jan. 15, 2017 in Thursday's
amended application, citing "the complexities of setting up operations
in Cuba with ground and customs clearance capabilities."

That is later than U.S. passenger airlines plan to arrive on the island
nation. American Airlines Group Inc., the largest U.S. airline by
traffic, said this week its first Cuban-bound flights will depart Sept.
7 to Cienfuegos and Holguin.

FedEx noted in the amended application that it remains the only
all-cargo applicant for U.S.-Cuba scheduled air services. The shift in
planned operations, however, suggests tourism, not trade, will take off
sooner as the U.S. loosens decades-long travel restrictions to Cuba.

FedEx delivery rival United Parcel Service Inc. confirmed Friday it
hasn't filed an application yet.

"UPS continues to assess the opportunity to provide services to and from
Cuba. As trade lanes open and demand for delivery services increases,
UPS will take appropriate action to meet the needs of our global
customers," it added in a statement.

Write to Mike Esterl at

Source: FedEx Downsizes Cuba Ambitions in Amended Flight Request - WSJ -

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