Is the Cuba Flight Bubble Bursting?

Another day, another airline pulling out of Cuba. This time Spirit has decided that their Havana service just wasn’t making ends meet. If you recall, an agreement was brokered between the United States and Cuba last year allowing scheduled flights between the countries for the first time in over 50 years. Domestic airlines began a land rush to stake their claim to any available routes they could. Just a year later, is the Cuba flight bubble bursting?

Cuba Flights: A Brief History

With much fanfare and publicity, American Airlines, Alaska Airlines, Delta Air Lines, Southwest Airlines, United Airlines and JetBlue, Spirit, Frontier and Silver Airlines were granted permission to began service. Soon thereafter these airlines dove headfirst into daily flights to Havana and other cities in Cuba that accept international travel. Remarkably, these flights weren’t just limited to puddle jumpers from Miami. For example, Alaska Airlines signed up for a daily flight from Los Angeles. Frontier thought they would see demand for a 4x weekly flight from Philadelphia. That’s ambitious to say the least.

Havana
Havana – Image Courtesy of LaHabana.com

 

Cuba Flights Today

Fast-forward a year the landscape changed quite a bit. It hasn’t taken long for the airlines to realize they might have bitten off more than they could chew. In just a short time, we’ve seen:

Spirit: Canceled all Cuban service

Silver Airlines: Canceled all Cuban service

American: Cut capacity (smaller planes) and canceled certain routes

JetBlue: Cut capacity (smaller planes)

Something tells me this is just the beginning.

Why Is Cuba Travel Failing?

There’s two main reasons Americans aren’t flocking to Cuba like airline executives thought they might. First, It’s still not technically legal to vacation there. The United States issues specific guidelines for anyone wishing to travel to Cuba. From the Cuban Embassy in Havana:

Now I realize that it’s fairly easy to bend the rules here. For example “support for the Cuban people” and “humanitarian projects” could easily be explained upon your return. I suppose tipping your bartender could be supporting the Cuban people, right? Nonetheless, many people aren’t willing to bend the rules, and that makes it more difficult to fill a plane.

The second major reason we’re not seeing a major influx to Cuba is infrastructure issues. It’s impossible to magically open up a country that’s been effectively shutoff from the world for 50+ years. Try to book a hotel in Havana and let me know what you find. It’s not great. The Americans that managed to make it have driven up prices at even the most mediocre of properties. So there’s plenty of seats to get you to Cuba, but nowhere to stay once you’ve arrived. It reminds me of the recent oil boom in the Dakota’s. We saw a flood of workers arrive, but had nowhere to live. As a result blue collar workers were paying thousands of dollars a month to live in trailers.

Bottom Line

These things take time. Even Starbucks can’t build a location on every corner in under a year. Over the coming years we’ll see more chain hotels, popular restaurants, and tourist activities emerging. Furthermore, travel should become more normalized so that the average American isn’t apprehensive about visiting. For now, the remaining airlines will need to determine whether they can afford to wait it out.

(H/T One Mile At A Time)

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