For the first time in more than 50 years, airlines in the United States of America will be able to offer scheduled commercial flights to Cuba. A memorandum of understanding (MOU) was signed by US Transportation Secretary Anthony Foxx, Cuban Minister of Transportation Adel Yzquierdo Rodriguez as well as other officials on February 16, 2016 and a US Department of Transportation (DOT) March 2, 2016 deadline for applications for flight allocations has seen a massive over subscription for the available traffic rights.

The airlines that met the deadline for applications comprised American Airlines, United Airlines, Delta Air Lines, JetBlue Airways, Southwest Airlines, Alaska Airlines, Spirit Airlines, Frontier Airlines, Sun Country Airlines, Dynamic Airways and Silver Airways. Cargo carrier FedEx Express and charter carrier Eastern Air Lines also made applications within the regulatory deadline.

The “eagerness of US carriers” to resume scheduled services to Cuba has been recognised by the DOT, and it “intends to reach a final decision as expeditiously as possible” on these flight allocations. If permission is obtained from the Civil Aviation Institute of Cuba (IACC), the carriers who applied for slots have indicated they could begin service from as early as the summer.

US travel to Cuba rose by more than 50 per cent last year and there has been an even greater rise in travel from other countries, since President Barack Obama and President Raul Castro announced a historic detente in late 2014. The US Secretary of State, John Kerry said the new agreement will facilitate growth in authorised travel between the countries. “In the past, US-Cuba dialogue was narrow, relatively sterile, and rare. Over the past year, it has been comprehensive, business like, and routine,” he said last year.

The MoU authorises airlines of each country to operate up to 20 daily scheduled frequencies between the US and Havana and up to ten daily frequencies to any other airport in the country (Camaguey, Cayo Coco, Cayo Largo, Cienfuegos, Holguin, Manzanillo, Matanzas, Santa Clara and Santiago de Cuba). It also permits unlimited charter services to and from any point in Cuba in accordance with the regulations of each country.

The agreement also includes a framework for an increase of frequencies in the future and calls on each country to provide “prompt and thorough consideration” to any request in accordance with the needs of the market and airport infrastructure. It also does not prejudice aircraft operation with no limit on the capacity of aircraft deployed in this market.

Although tourist travel from the US to Cuba is banned, the agreement facilitates travel that falls into twelve certain categories. These include family visits, trips related to journalism, government business and public performances. And as any city in the US and Cuba can be served, many of the routes proposed by airlines in their DOT applications overlap and create competition Unsurprisingly, most of the proposed routes are to serve the Cuban capital of Havana, with a heavy bias towards the Florida coast where there is a large Cuban community.

American Airlines is leading the way and seeking to provide 12 of the permitted 20 daily flights to José Martí International Airport in the Cuban capital, Havana, including ten daily frequencies from its hub in Miami. In its application the oneworld alliance member claimed it’s the only airline to propose “sufficient frequencies to meet the anticipated near term growth in demand for the US-Cuba travel by the Miami-Dade Cuban-American community – nearly half the Cuban-American population of the entire United States.”

The likelihood of American obtaining so many slots from Miami is slim, as other carriers have applied for the same pairing. The US regulator is likely to work to balance supply and demand. They will have to try to ensure that there is ample service from the regions that generate the most demand for travel to Cuba - as the Miami-Fort Lauderdale-Pompano Beach area is home to the largest population of Cuban-Americans, this service is likely to be served by numerous carriers. But at the same time the regulator will seek to maximise competition for customers and provide some geographical diversity in its network selection.

American faces competition for the Miami slots from Frontier Airlines, which is hoping to provide a three times daily service for this route, as well as adding a single daily rotation from Denver to its network. Charter carrier Eastern Airlines is also planning to offer a daily Miami - Havana service.

JetBlue Airways, which has grown strongly in the Caribbean, has also applied for huge slot allocations. A total of 15 daily frequencies has been proposed, reaching four Cuban cities from six US destinations. From their main base in New York’s John F. Kennedy International Airport, JetBlue wants to provide two daily frequencies to Havana .It is also planning to fly one daily rotation to the Cuban capital from Newark Liberty International and Boston Logan.

However, again showing the strong bias to the Florida market, the majority of JetBlue’s proposed service will come from the state – with potential services from its Fort Lauderdale focus city to Havana four times a day, and Camaguey, Holguin and Santa Clara on a daily basis. It also plans to link Havana with both Orlando and Tampa on a twice daily basis. Should the airline be allocated these slots, JetBlue anticipates a start date of September 8, 2016 or within 100 days after receipt of all necessary approvals – whichever is earlier.

Dynamic Airlines has applied for less than daily scheduled frequency allocations to Havana from New York, which would be served three times a week, as well as Chicago and Los Angeles which would be served four times a week. In order for the proposed service to be viable, Dynamic said it would need at least three of the requested frequencies in each city-pair market which will be served non-stop and on a year round basis.

Should the allocations be awarded to Dynamic, the airline will utilise widebodied Boeing 767-300 equipment on the routes, with the ability to carry 280 passengers in an all-economy cabin. The proposed start date for the Chicago O’Hare service is November 21 2016, with New York and Los Angeles services commencing a day later.

Delta Air Lines is hoping to expand their network by serving Havana from four key cities in the US – its hubs in Atlanta, New York JFK, as well as Miami and Orlando in order to secure the largest percentage of Cuban-Americans. The Atlanta and New York flights will be served by a Boeing 757-200, whereas Miami and Orlando would utilise Boeing 737-800.

The world’s largest airline in terms of number of destinations served, United Airlines, has proposed adding Newark, Houston, Washington and Chicago links to Havana to its network. These four US destinations were chosen, according to the US major, as they are some of the largest US metropolitan areas and home to some of the largest Cuban-American populations. It plans to serve the Cuban capital, the 35th capital city in its network, from its Newark hub on a daily basis but with just weekly flights from the other cities.

Low-cost carrier, Southwest Airlines plans to serve Havana from Fort Lauderdale, Tampa and Orlando. In addition to these pairings, Southwest has proposed flights from Fort Lauderdale to Varadero and Santa Clara. Should DOT approve these services, Havana will be served daily from the three busiest airports in Florida. Southwest believes its low cost model is ideal to fulfil the demand for services to Cuba, claiming its one way flights to Havana would be around $45-50 cheaper than rival services – Southwest claim it will “almost certainly have the lowest South Florida–Havana fares of any applicant in this case.”

Meanwhile, ultra-low-cost carrier, Spirit Airlines is also seeking traffic rights to fly between Fort Lauderdale and Havana. The carrier has applied for two daily flights on the route and believes its modest application will make the most important contribution to maximise public benefits and ensure a competitive market structure.

Spirit says it will offer at least 580 seats a day into this market using an A319 and offering the lowest price points which are most attractive to Cuban American families, most of whom have very modest incomes. Importantly, the airline notes, it can quickly substitute larger A320 (178 seats) or A321 (228 seats) equipment to accommodate higher loads based on changing demand, holidays or the reduction or elimination of current travel restrictions.

Alaska Airlines is intending to fly to Havana from Los Angeles with two daily non-stop flights. Its focus seems to be on connectivity, as it serve nine destinations in Latin America, and large West Coast cities like Anchorage, Alaska; Portland, Oregon and Seattle, Washington from the airport. The Havana flights would be served by a Boeing 737-900ER, carrying 181 passengers in a two-class configuration.

Elsewhere, Sun Country Airlines is seeking rights for an up to four times weekly link between Minneapolis/St. Paul and Havana, twice weekly via Fort Myers and weekly winter seasonal services between Minneapolis/St. Paul and Santa Clara and Matanzas. It plans to utilise either Boeing 737-800 aircraft (162 seats) or 737-700 equipment (126 seats) on the routes with start dates in November and December 2016.

It may be the smallest of the airlines seeking traffic rights but regional carrier Silver Airways is the only applicant to propose service to all ten Cuban international airports. It says its service proposal will “maximise public benefits” by deploying “appropriately sized aircraft” to link multiple communities throughout Florida to the entirety of Cuba. These include planned links to Havana from Palm Beach, Jacksonville, Key West and Fort Myers as well as flights between Fort Lauderdale and Cuba’s other airports.

Altogether, the airlines in question have requested almost three times as many routes to Havana as the US DOT is allowed to distribute. This can only be good news for customers as the increased competition will lower prices and offer plenty of choice.

As the flags went up in July last year in Washington and the following month in Havana as ceremonies were held to mark the re-opening of embassies after a period of 54 years, so did hopes for a new era in which policies and attitudes will be driven not by past animosities but by mutual interests.

“We have further empowered a Cuban private sector that now employs at least one in four Cuban workers,” said US Secretary of State, John Kerry at the time. “There has been a dramatic change in policy, but it represents no change in our aspiration for Cuban citizens – that they be given a chance to live in a peaceful, prosperous, open, and democratic society.”

There was also expected to be a further thawing of the US-Cuba relationship as this issue closed for press and with further measures to ease travel and trade restrictions being announced ahead of President Barack Obama’s historic visit to Cuba in the second half of March 2016 to try to kick start a business relationship with Cuba.

Despite the optimism and massive interest from the US carriers to the potential for Cuba, the delivery of multiple daily scheduled frequencies into Cuba from the US is like to be a slow process so as to not overwhelm the nation’s limited tourism infrastructure. Predicted market demand will ultimately determine whether charter flights continue or are replaced by new scheduled links.

At the recent Routes Americas air service development forum in San Juan, Puerto Rico, senior executives of both JetBlue Airways and Southwest Airlines noted infrastructure concerns, a view that was highlighted by industry body IATA and also echoed from the cruise industry by Carnival Cruise Lines

Peter Cerdá, IATA’s Regional Vice President in the Americas said it could be some time before these available frequencies come to fruition. “While Havana gaining 20 new flights per day will not create an overcapacity, it could be four or five years before all these 110 flights are up and running as we don’t currently have the infrastructure in place to support them. This isn’t necessarily the airports but also hotels and road link,” he said.

Terry Thornton, Senior Vice President of Itinerary Planning for Carnival Cruise Lines described many of the country’s ports as in “a sad state of affairs,” but explained that after a US Coast Guard review of the facilities that it was “fully capable and ready to invest” in Cuba. In fact the cruise operator is hoping to start offering itineraries including the country from as early as April and has located the 850-passenger Fathom in the Dominican Republic from where it can start making visits once permission has been granted.

The new Air Service Agreement (ASA) between the US and Cuba permits up to 110 daily frequencies from carriers from each country and therefore Cuban operators are also entitled to traffic rights. It is likely that this entitlement will remain unused for the foreseeable future as the Island’s national carrier, Cubana does not have authority to serve the US market and it could be a long process gaining accreditation.

However, a number of international groups are looking closely at the option of establishing business ventures in the Cuban market to make use of these traffic rights. Local officials have suggested that informal discussions have taken place between government officials and at least three interested parties. One of these, it was revealed at Routes Americas, is Viva Group, which is currently in the process of establishing new low-cost business units across Latin America.

Viva Latin America chief executive officer, Joe Mohan confirmed to Routes News that Cuba could be among those markets under consideration for a future Viva Airlines operation. “We think that Cuba could be a great opportunity for us. It is an interesting place and with no local carrier registered to fly to the US it provides an excellent opportunity to take advantage of the new traffic rights between the countries,” he said. “We have actually already had conversations with Cuba. We would love to set up an airline tomorrow.”

The reaction from the US airline industry to the Cuban opportunity highlights the massive potential on offer from a market that has been closed to scheduled traffic for more than half a century. Cuba boasts something unique in the international tourism market and the US DOT now has the power the air accessibility that will permit improved connectivity. But the key question at this stage remains whether the country's ageing tourist infrastructure can cope with an impending spike in visitor numbers.