A year ago, President Obama announced a new U.S. diplomatic stance toward Cuba, citing a half-century of failure in trying to isolate the island. On Thursday, one year to the day later, the State Department announced an agreement for commercial air service between the United States and Cuba.
For the first time since the early 1960s, Americans will be able to buy a commercial plane ticket next year and fly to Cuba, as they do to get anywhere else.
Is this a big deal?
For airlines, it’s huge: A large Caribbean nation cut off from America since the early 1960s and ready to partake in some capitalism represents a robust business opportunity. “A bit of an early Christmas present,” said Scott Laurence, a senior vice president at JetBlue Airways, which wants to serve Cuba from Fort Lauderdale, Fla., Orlando, New York, and Tampa. And possibly from Newark, N.J., a United hub.
United said in a statement that the company looked forward to offering flights to Cuba as soon as it has approval to do so.
American Airlines, which has a hub in Miami and 23 weekly charter flights to five Cuban cities, is eager to expand its Caribbean network into Cuba. The airline will apply to serve Cuba from Miami and its other hubs, Howard Kass, American’s vice president of regulatory affairs, said during a conference call on Thursday.
So when can I go?
U.S. sanctions still prevent U.S. tourists from traveling to Cuba. Until that law changes, if one of your travel goals is to sip a daiquiri on a Cuban beach, then no, this isn’t big news for you.
Travelers to Cuba must meet the rules for a dozen categories (PDF) of licensed activity outlined by the Treasury Department’s Office of Foreign Asset Control. Those include things such as professional research, educational activities, humanitarian work, journalism, sports contests, and professional conferences.
“The traveler’s schedule of activities must not include free time or recreation in excess of that consistent with a full-time schedule in Cuba,” the agency says. Translation: Tanning time is not on the government’s approved list.
Those guidelines look vague
The guidelines will be an area in which U.S. airlines will need to demand clear rules from the Treasury: Who bears the burden of policing this? And who will ensure that your “professional research” is a bit more involved than sampling all the rums in the tourist zones?
On today’s charter flights to Cuba, travelers must certify the reason for their visit, basically pledging that they meet the U.S. requirements. This involves just filling out a form and submitting it to the charter company, which must retain it for five years, per U.S. rules. You will also need to obtain a $75 visa from the Cuban government before you step onto a plane.
“I anticipate those formalities ... will become the airlines’ or operators’ responsibilities,” Laurence said. “I have a [charter] business partner that does that now. I’m going to have to get smart on that quickly.”
It’s unclear what kind of trouble individuals might face for violating the Treasury travel rules. Banks, travel companies and other businesses have faced OFAC enforcement action for violating the U.S. sanctions on Cuba. A spokeswoman for OFAC did not have an immediate comment on whether any recent enforcement actions have been taken against people who visited Cuba outside the permitted travel categories.
“There is enforcement but not that I’m aware of for individuals” who visit Cuba but do not meet the 12 categories of authorized travel, said Bob Guild, vice president of Marazul Charters in North Bergen, N.J., which has organized charter flights to Cuba since the 1970s. “Do you have enforcement in the United States worried about people flying to Cuba when you have free and open travel to Syria, China, Iraq, North Korea, Iran and all these other places?”
I fit into one of those groups, so when can I buy a ticket?
The agreement allows for 20 daily flights to Havana and as many as 10 flights to nine other international airports in Cuba.
Early in 2016, the Department of Transportation plans to detail how airlines can apply for those 110 daily flights and then allot the number of origin cities and frequencies. Once that process is resolved—it’s likely to be contested, given the relative scarcity—U.S. airlines will begin selling tickets. Service in mid-2016 is a decent guess.
How much will it cost?
That is still to be determined, but chances are good that scheduled flights will cost less than the charters, which are about $400 and up, depending on the cities. Carriers such as JetBlue are also eager to stimulate new demand whenever they launch a new route. Charter operators are also hoping that scheduled service will help to streamline the bureaucracy and possibly wring some costs from their business.
Won’t this kill the charter business?
Probably not, as demand for travel to Cuba is enormous, relative to the supply. There is room for both parts of the air service. Activity at Marazul, for example, has jumped 45 percent in just the non-Cuban-American part of its business, Guild said. Group tour bookings have increased 100 percent for 2016, he said.
Havana Air, which has 85 flights per month from Miami to five Cuba cities via Eastern Airlines, plans to introduce an online booking portal next month to make planning a trip easier. Charter tour companies also have an expertise that's important for trips to Cuba, “as it is a process that is still widely unfamiliar and unlike visiting any other country in the world,” Havana Air President Mark Elias said in an e-mail.