US-Cuba: US regulators must weigh likely demand in a hotly contested race to resume flights

The forging of a new bilateral air services agreement between Cuba and the US has resulted in numerous airlines vying for available frequencies between the two countries. Service requests are wide-ranging - full service airlines, LCCs, ULCCs and smaller airlines such as Silver Airways are competing to seize on an opportunity to serve Cuba. US regulators are in the process of evaluating the proposals from those airlines, but the proceedings are obviously very different from more typical route awards. The government has no historical data to study demand patterns in weighing the merits of the route requests submitted by US airlines.

Two of the many US airlines vying for new service - American and Spirit - have offered suggestions to gauge the market for new scheduled flights from the US to Cuba. American has the view that it is prudent to examine data from charter operations, and the census data showing the largest Cuban American population centres. Spirit offers another point of reference, noting that the Dominican Republic could serve as a proxy to estimate the market potential for Cuba, highlighting similarities between those two countries. Obviously other airlines competing for flights to Cuba will weigh in with their own suggestions to determine the market size.