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Cuba's alluring new mystique quickly fades as US airlines face overcapacity and sluggish demand

Analysis

Close to a year ago the US airlines were rushing to gain approval to operate scheduled service to Cuba, after a hiatus of more than 50 years. The competition was intense, with airlines strongly criticising the touted merits of the service proposals offered by their rivals. The opportunity for operations to Cuba seemed endless, and US airlines from wide ranging business models worked feverishly to ensure that they earned access to what was deemed the next big market for burgeoning traffic potential.

But underlying the excitement were concerns over Cuba's ability to handle an influx of travellers to the US, and whether the expectations for demand between the two countries were overblown. Recent cuts in Cuban capacity by US airlines show that those operators were somewhat overzealous in their initial demand calculations, and the spool up period for those routes.

The tempered ambitions reflect the realities of actually operating in a market versus estimating the demand patterns of a new market but having little in the way of concrete data to work with. Due to market overcapacity, two US airlines are pulling service to Cuba altogether.

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