American bullish on Cuba despite demand uncertainty
TODAY IN THE SKY
Bart Jansen and Ben Mutzabaugh, USA TODAY 9:18 p.m. EDT October 20, 2016
When Cuba opened up to U.S. airlines earlier this year, nearly all
rushed in with requests to add new service to the island. Against that
enthusiasm, however, some industry executives openly wondered whether
demand would live up to the hype.
Without regular airline service to the island in five decades, there was
little data available to carriers in trying to assess potential demand
for flights to new destinations. And unlike other foreign markets, Cuba
remains a unique and highly regulated place for U.S. airlines to do
American Airlines officials seemed to acknowledge on a quarterly
earnings call Thursday that they’re still feeling out the company’s new
service to Cuba, where American opened five new destinations for regular
commercial service during the third quarter.
Those new destinations became possible after the Obama administration
allowed scheduled flights to resume after a 50-year hiatus, part of an
initiative to restore diplomatic relations with the Communist country 90
miles from Florida.
American won more flights than any other U.S. carrier from among the 110
total daily round-trip flights that were up for grabs to 10 cities in
Cuba. Havana was capped at 20 daily flights, of which American won five.
American’s first flights to Havana begin later this year, despite
challenges selling tickets since flights to other cities began in August.
“I think everyone is struggling a little bit in terms of selling in
Cuba,” Don Casey, American’s senior vice president of revenue
management, said during the call. “There a lot of restrictions that are
still in place that has made it difficult to sell.”
Casey said the greatest strength for forward booking has been in Havana,
where American has long had a charter operation.
“We’re in it for the long haul,” American CEO Doug Parker added. “This
is really a new market. We’re excited to be the largest carrier there.
We’re committed to Cuba and making it work.”
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