US-Cuba Talks Could Spur New Wave of Airline Expansion

A new agreement between the US and Cuba means that regulations will no long prohibit air carriers from scheduling regular flights to Cuba, which is expected to lead to a significant number of new routes between the two countries.

The US Treasury and Commerce Departments unveiled a new set of rules that ease travel and trade restrictions to the island, as long as US citizens certify they are travelling through on one of 12 approved categories, which include family, educational and humanitarian trips.

However, establishing air travel could take a while longer, though the charter flights which have existed in previous years will still be allowed to continue. More charters likely would be allowed in the near term.

Before any routes are established, the US Department of Transportation must engage with Cuba to negotiate a bilateral aviation agreement.

“With regard to US carrier authority to serve Cuba, the Department has previously stated that, at such time as scheduled services could again be undertaken in the US-Cuba market, we would take a fresh look at the market,” said a statement from the US Department of Transportation.

The announcement has still prompted a positive response from US airlines such as United, American Airlines, Southwest Airlines and JetBlue Airways.

The Department has also stated that, "in reviewing the market in light of the changed circumstances, including the updated bilateral relations with Cuba, any carrier holding long-dormant U.S.-Cuba authority would enjoy no advantage.”

The last US-Cuba bilateral air services agreement was signed in 1953, just before the Cuban Revolution, and has essentially been dormant for over half a century.

A new aviation agreement could either set an open relationship, with no restrictions on the number of flights, carriers or destinations.

On the other hand, it could end in a restrictive agreement which would require US carriers to put forward proposals for flight slots, leaving it to the Department of Transportation to decide which US airlines would be given permission to fly into Cuba.