Tampa Bay Business Journal
18 May 2017
By Frances McMorris
After several other airlines recently announced they were cutting back their flights to Cuba, Southwest Airlines, which began flights between Tampa and Havana late last year, is also watching how that new market is doing, said the airline’s chief executive.
“We’re very carefully monitoring our developing markets; Cuba is something we’ll have to continue to watch,” Southwest CEO Gary Kelly, said Wednesday at the carrier’s annual shareholder meeting being held in downtown Phoenix.
“Havana looks like a normal developing market, and the other two cities have very modest traffic demand at this point," he said. "So that’s something we’ll need to continue to watch. I don’t want to pull the plug yet, but the demand is going to have to pick up to sustain those flights.”
Including Havana, Dallas-based Southwest Airlines’ (NYSE: LUV) has three destinations to Cuba.
Southwest's new route between Tampa International Airport and Havana that began December 12 helped drive TIA's Cuba traffic in January up by approximately 10 percent. That traffic has been rising steadily ever since with a nearly 32 percent jump from February through April. In February, traffic for Cuba was 6,968 rising to 9,627 in March and 9,187 in April. Between 2012 and 2015, there has been a 65 percent increase in TIA-Cuba passenger traffic, reaching nearly 37,000 passengers last year.
Just as significant, TIA’s annual revenue from Cuban air traffic rose by 23 percent to $1.4 million for 2016; up from $1.13 million in 2015. In 2014, that revenue was $970,000.
Tampa Bay is home to the third largest Cuban-American population in the country with Cuban ancestry representing one-fifth of Tampa’s Hispanic population. With approximately 170,000 Cuban-American residents in the region, Tampa was one of only 10 U.S. cities to win direct commercial flights to Havana.
However, the pursuit of flights to Cuba by U.S. carriers has seen a dramatic turnaround in recent months.
Consider the decision of Spirit Airlines (Nasdaq: SAVE). In April, the Miramar-based ultra-low-cost carrier said it would end its service between Fort Lauderdale and Havana on May 31.
Then there is Denver-based Frontier Airlines and Fort Lauderdale-based Silver Airways. In March, the two carriers said they would be exiting the Cuba market. Both airlines attributed the change to lower-than-expected demand and over-capacity on routes between Florida and Cuba. Frontier, which also noted high costs, said it would end its daily Miami-Havana service on June 4.
Late last year, Fort Worth-based American Airlines (Nasdaq: AAL) said that starting in February it would reduce the amount of flights to Cuba by 25 percent. American was the second U.S. airline to announce its service to Cuba.
New York-based JetBlue Airways Corp. (Nasdaq: JBLU) was the first airline to announce that it was launching flights between the U.S. and Cuba. Last month, JetBlue filed an application to add more flights between Fort Lauderdale and Havana, and to launch what it says would be the first-ever nonstop service between Boston and Cuba’s capital city. Jetblue’s latest move comes after it said in February that it would be pulling back on its Cuba service.
Officials for the U.S. and Cuba signed a deal last year to restore commercial air service between the two countries for the first time in decades.
In 2014, former President Barack Obama first announced more lenient travel restrictions on traveling to Cuba. He had repeatedly called on the Congress to lift the Cuban embargo. His administration said that authorized travel to Cuba increased by more than 75 percent from 2014 to 2015.
Obama became the first sitting U.S. president to visit Cuba since 1928 when he went there last year. The Tampa Bay Rays also went on that trip, playing a game against the Cuban National baseball team.
Despite the death in December of former Cuban leader Fidel Castro and the easing of trade and travel restrictions under Obama, uncertainty surrounds the future of U.S.-Cuba relations in light of the hard-line campaign rhetoric about Cuba from President Donald Trump.