This week reservations systems zeroed out service on Frontier Airlines from Miami (MIA) to Havana and on Silver Airways from Fort Lauderdale (FLL) to nine Cuban destinations. Flight from Florida to Cuba have been struggling since its inception last year after over a half century of a ban on commercial service but we can learn a great deal from both airline’s failures.
Regarding Frontier, while it was assumed most traffic to Cuba would be of the origin and destination (O&D) variety (non-connecting), the Denver-based airline’s lack of profile in southeast Florida and almost non-existent connecting traffic in Miami killed it’s chances to make a real go on the route. In Silver’s case, the ambitious plan to serve secondary Cuban cities from Fort Lauderdale was in hindsight ill-advised. Yes, the airline faced no competition to some places but the market just isn’t mature enough for so many links. As a commuter carrier flying small prop planes, Silver depends heavily on connecting traffic at FLL, mostly from United but also from JetBlue and doesn’t have the marketing budget even as a local carrier to aggressively seek O&D. The few lucrative routes Silver was flying from Fort Lauderdale were also served by either JetBlue or Southwest with jet aircraft and several connecting opportunities.
The bottom line on Cuba flights is too much capacity was awarded to airlines anxious to open a new market. Tourism and trade isn’t well enough established between the two countries to justify so much air service. American authorities believed awarding about 70% of the flights to originate in Miami or Fort Lauderdale would stimulate demand, and while some demand does exist, not enough to justify so many flights on so many different carriers. The market to Cuba outside south Florida is almost non-existent, something the authorities were aware about and thus they did not create to many flight opportunities from other points.
Tomorrow, Southwest Airlines it is rumored might temporarily scale back its own Florida-Cuba operation (due to a shortage of available aircraft) which features five daily flights from Fort Lauderdale to three destinations on the island and from Tampa to Havana. Southwest has struggled in the market much like everyone else but have long-term plans for an international hub in Fort Lauderdale and as one of the world’s largest airlines they can absorb short-term losses for long-term gain in a newly opened market in a manner Frontier and Silver just could not. Any draw down of Southwest flights to Cuba is likely to be temporary in the window in which the airline slowly takes delivery of new 737 MAX aircraft while rapidly retiring less fuel-efficient and older 737-300 planes. Due to the transition of aircraft it is thought by industry analysts, Southwest will be forced to reduce capacity network-wide in late 2017 and early 2018 before ramping back up in the winter months next year. Southwest carried the second most passengers of any airline in the world during 2015.
The general consensus is that American Airlines with its large Miami hub and strong market presence along with JetBlue with its growing Fort Lauderdale hub and high name recognition in the state are doing better than other US carrier in the Cuba market (JetBlue is doing at least decently well on it’s lone non-FLL to Cuba route which operates from Orlando to Havana). It is worth noting both airlines have the right formula for O&D and connecting traffic to make a go of the flights. Southwest as we’ve discussed before has the ability to connect passengers from domestic destinations via Fort Lauderdale, but in terms of local brand recognition they aren’t yet thought of as a carrier you fly from south Florida to Latin America the way American and JetBlue are.