US airlines and the Cuba route awards Part 1: The US DoT slices up many pieces of the Havana pie

US regulators have decided to spread Havana award rights among eight operators – a mix of global full service airlines, medium frills low cost carriers and ULCCs. Unsurprisingly, given the concentration of Cuban Americans residing in the region, South Florida features prominently in the tentative award approvals.

In theory, the DoT’s proposed route structure ensures that customers travelling to Havana have access to a wider range of fare prices and product offerings. In many respects the agency had little choice but to accommodate as many airlines as possible for service to Havana – in order to ensure that consumers had an array of service providers as scheduled air service resumes between the US and Cuba.

There may be some quibbles regarding the tentative route awards to Havana, but the route composition proposed by the DoT is not likely to change drastically. The agency’s route dispersal reflects certain expectations that the agency would institute a certain level of competitive diversity on new services to Havana.

(This is Part 1 in a series examining US-Cuba route awards. Part 2 will examine markets other than Havana)

The large US airlines seeking Havana rights are granted portions of their initial requests

A thawing of relations between the US and Cuba under the administration of President Barack Obama led to an agreement to begin liberalising air services between the two countries. This was after a 50-plus year absence in commercial air service between the two countries. The loosened bilateral allows for 20 daily flights from the US to Havana and 10 daily flights to nine other Cuban airports, for a total of 110 daily frequencies. Tourist travel remains prohibited and instead travellers must fall into 12 established categories, ranging from family visits to educational activities.

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Obviously Havana is the big prize for the airlines that sought to serve Cuba’s capital and largest market.  All of the larger US airlines vying for service received rights to serve Havana – American, Delta, United, Alaska, Southwest, jetBlue, Spirit and Frontier. Smaller airlines, including Silver Airways, Eastern Airlines, Sun Country and Dynamic International Airways, did not prevail in winning the rights to serve Havana.

All the airlines that have won tentative rights to serve Cuba received some portion of their initial route request made to the DoT.  American asked for 14 daily flights to Havana, 10 of which would originate from its Miami hub. Obviously no one airline could receive more than half of the daily flights to Havana, but American did receive five daily flight rights to Havana – four from Miami and one from its hub in Charlotte.

Tentative route awards to US airlines for service to Havana


Miami, four times daily

Charlotte, once daily

Alaska Los Angeles, once daily

New York JFK, once daily

Atlanta, once daily

Miami, once daily

Frontier Miami, once daily

Fort Lauderdale, once daily (except for Saturday)

New York JFK, once daily

Orlando, once daily


Fort Lauderdale, twice daily

Tampa, once daily

Spirit Fort Lauderdale, twice daily

Newark, once daily

Houston Intercontinental, once weekly

Ultra-low cost airline Spirit was the only airline to receive exactly what it asked for in its reasonable service request, which was two daily nonstop flights from its headquarters and largest base – Fort Lauderdale.

Original route requests for Havana by selected US airlines


Miami, 10 times daily

Charlotte, once daily

Dallas/Fort Worth, once daily

Los Angeles, once weekly

Chicago O'Hare, once weekly


New York JFK, once daily

Atlanta, once daily

Orlando, once daily

Miami, twice daily


Newark, once daily (with additional Saturday service)

Washington Dulles, once weekly, Saturday

Houston Intercontinental, once weekly, Saturday

Chicago O'Hare, once weekly, Saturday

Alaska Los Angeles, once daily

Fort Lauderdale, six times daily

Tampa, once daily

Orlando, once daily


Fort Lauderdale, four times daily

Orlando, twice daily

Tampa, twice daily

New York JFK, twice daily

Newark, once daily

Boston, once daily


For Lauderdale, twice daily


Miami, three times daily

Denver, once daily

US regulators concentrate Havana flights in South Florida among FSCs, LCCs and ULCCs

Airlines with a higher concentration in South Florida had some advantage in the Havana awards, given that the Miami-Fort Lauderdale metro areas are home to a significantly higher proportion of Cuban Americans than are other large US cities. The DoT had a responsibility to concentrate most of the flights in the areas that will generate the most demand.

Top 10 Cuban American populations in the USA by metro area (thousands)

Miami-Fort Lauderdale 983
NY-NJ-Long Island 135
Tampa 82
Los Angeles 50
Orlando 37
Chicago 21
Las Vegas 21
Fort Myers 20
Houston 19
Atlanta 18

Twelve of the 20 daily Havana flights tentatively selected by the DoT will be operated from Miami International and Fort Lauderdale International. US regulators did a fair job of spreading those flights among full service, low cost and ultra-low cost airlines.

From Miami, Delta joins American in operating one daily flight to Havana, and the ULCC Frontier was awarded a single daily flight, ensuring that American didn’t hold a complete monopoly on Miami-Havana flights.

Spirit has argued that its two daily flights from Fort Lauderdale to Havana would represent 9% of the total seats to Havana. The company proposed that this would constitute enough service to “keep downward pressure on fares between the US and Havana”. Indeed, now the US’ largest ULCCs – Spirit and Frontier – will each have daily service to Havana, which should result in a pool of fares low enough to cater to cost-conscious travellers.

In addition to the two daily flights that Spirit is tentatively allowed to operate from Fort Lauderdale, Southwest was also awarded two daily flights, and jetBlue gains twice daily service with the exception of Saturdays.

That proves to be an interesting mix of airlines. jetBlue is enjoying some revenue benefit from the roll-out of its fare families, which feature varying levels of frills. Although Southwest offers free checked bags, it will be interesting to see how customers to Cuba view Spirit’s pure ULCC model, jetBlue’s medium frills and Southwest’s no nickel and diming mantra.  Those three airlines are the largest operating from Fort Lauderdale, so each has a certain level of brand recognition in the market.

Tampa and Orlando – the third and fifth largest Cuban American population centres – each received a single daily flight to Havana. Southwest won the tentative award for Tampa and jetBlue for Fort Lauderdale. Southwest is the largest airline at both Tampa and Orlando, and jetBlue is the second largest airline serving Orlando, which is a focus city for the company.

Southwest had originally requested one daily flight each from Tampa and Orlando. jetBlue asked for two daily flights from each airport. In order to ensure other population centres received service, the DoT granted a single daily flight from Tampa and Orlando.

Top three airlines measured by system seats at Florida airports that were awarded Havana service (11-Jul-2016 to 17-Jul-2016)


American 69%

Delta 6%

Avianca 2%

Fort Lauderdale

jetBlue, 25%

Spirit, 21%

Southwest 18%


Southwest 27%

jetBlue 14%


Southwest 38%

American 17%

Delta 17%

Havana gets connections through Atlanta and Charlotte. Alaska is granted West Coast flights

The US metro region with the second largest concentration of Cuban Americans – New York – gained three tentative daily flights to Havana. Delta and jetBlue were awarded one daily flight each from JFK, and United gained a single daily flight from its Newark hub.

Atlanta, which is ranked as the tenth largest Cuban American population centre, gained one single daily flight to Havana operated by Delta, which has a massive hub at the airport. American also gained a single daily flight to Cuba’s capital from its Charlotte hub.

Chicago, which is home to the sixth largest Cuban American population, did not receive any route awards to Havana. United requested Saturday only flights from its hubs at Chicago O’Hare, Houston Intercontinental and Washington Dulles, but only received approval for the once weekly flights from Houston.

The award to American from Charlotte may seem odd given most of the traffic between the US and Cuba will be O&D. But American has argued that service from a hub such as Charlotte ensures blanket connectivity to other Cuban American population centres. The same rationale could be applied to Delta’s flights from Atlanta to Havana. The single daily flight in each market offers connecting passengers a better schedule than the Saturday-only flight from O’Hare. American also originally requested a single daily flight from O’Hare to Havana, and also between Los Angeles and Havana.

Alaska only requested service from Los Angeles to Havana and was awarded one daily flight on the pairing. The flight from Alaska ensures daily service to Havana from this US metro area – home to the fourth largest Cuban American population. Alaska only represents a 4% seat share in the fragmented Los Angeles market, so it may need to take an assertive approach in marketing its flights. But as the only airline operating between Los Angeles and Havana, the flight could essentially market itself.

It would have been tough for the DoT to leave Alaska out of the Cuba awards as the three large global US airlines, Southwest, jetBlue and the ULCCs Spirit and Frontier all received routes rights. As Alaska argued in its petition for service – American, Delta, Southwest and United control 84% of US domestic revenue. “In this competitive environment, the service alternatives that Alaska offers have become an antidote to the Big Four’s market dominance”, Alaska stated.

Top three airlines measured by system seats at other airports awarded Havana service (11-Jul-2016 to 17-Jul-2016)

Los Angeles

American, 21%

Delta, 16%

United, 14%


American, 91%

Delta 4%

United 2%

New York JFK

Delta, 27%

jetBlue 21%

American, 14%


Delta, 79%

Southwest 10%

American 3%


United 70%

American, 6%

Delta, 5%

Houston Intercontinental

United, 76%

American, 6%

Spirit, 5%

DoT deserves credit for its Havana allocations. The market will undergo intense scrutiny

The Havana route award proceedings were a rare case in which both large global network airlines and low cost and ULCCs all had the opportunity to compete for authority to operate to Cuba’s capital. Unlike the situation with trans-Atlantic or trans-Pacific route awards that are largely limited to global network airlines, here the DoT needed to consider carefully how to ensure that the arguments of smaller airlines were heard and evaluated.

With the tentative awards the DoT can be credited for creating a level playing field on flights to Havana.

Now it is time for the airlines to prove the validity of their arguments for gaining rights to compete in what will be one of the closely watched markets in the time ahead.

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