Wednesday, October 26, 2016

United States / Cuba Air Service - Is It Too Much, Too Soon?

United States/Cuba Air Service: Is It Too Much, Too Soon?
I've been covering the airline industry since 1989.
Opinions expressed by Forbes Contributors are their own.

As U.S. airlines gear up to serve Cuba, the CEO of Spirit Airlines is
warning that the flights aren't going to offer much in the way of profits.

"There's going to be a lot of capacity coming very, very quickly,"
Spirit CEO Bob Fornaro said Tuesday on the carrier's third quarter
earnings call. "Generally, that's not a positive for those markets.

"It's a leisure destination," Fornaro said. "You have to put it in the
perspective of how big that opportunity can really be.

"There's not much infrastructure there," he added. "It's going to
something that will develop over a long period of time. Initially, it
might take away a little bit from other Caribbean operations."

Eight major U.S. carriers have or will add Cuba service in the next few
months as President Obama has moved to normalize relations between the
two countries. Fornaro's comments reflect what American Airlines
executives said last week on the carrier's third quarter earnings call.

"I think everyone is struggling a little bit in terms of selling in
Cuba," said Don Casey, senior vice president of revenue management, on
the American call. "There are a lot of restrictions that are still in
place that made it difficult to sell."

American flies 56 weekly flights to Cienfuegos, Holguin, Santa Clara,
Camaguey and Varadero. American "has been flying to five Cuban cities
for just over a month but so far its regularly scheduled flights to the
island are often less than half full," The Miami Herald reported Oct. 14.

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Source: United States/Cuba Air Service: Is It Too Much, Too Soon? -

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