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Charter airlines say end to restrictions could boost Miami-Cuba traffic by 50%
CubaNews / March 2009

By Larry Luxner

Air charter companies that were nearly decimated five years ago, when the Bush administration made it next to impossible for Cuban-Americans to visit family on the island, say business will take off once President Obama lifts those restrictions as promised. But how much it’ll take off is anybody’s guess.

“There will be an increase, even with the economic situation we’re confronting,” said Armando García, president of Marazul Tours.

“During the last five years, illegal travel has increased tremendously, but we were not participating in that market,” Garciá told CubaNews in a phone interview from Miami.

“Once Obama lifts the restrictions for Cuban-Americans, it’s going to take some time for this market to get organized in a legal way. According to my calculations, close to 45% or 50% of all travelers are flying to Cuba illegally through third countries. And this market, which is already established, is not going to disappear immediately,” said García.

Marazul, which marks its 30th anniversary this year, has been in business the longest of the seven air-charter companies licensed by the U.S. Treasury Department to fly passengers between Miami and Havana.

Thomas L. Cooper, president of the international division of Gulfstream Air Charter, says that among the seven charters, Wilson Inter-national ranks first place in passenger volume to Cuba, followed by Gulfstream, with ABC Char-ters and Xael tied for third place.

“What happens all depends on the degree of elimination of the restrictions,” Cooper told us.

“If Obama simply turns back the regulations to pre-2004, when Bush tightened them, it’s my estimation that the market will increase by about 40-50%. You’d think it would increase 75%, but there’s a lot of traffic going between the U.S. and Cuba on religious licenses, and if you qualify for such a license, then you’re not bound by the once-every-three-year rule.”

In 2004, then-President Bush — acting by executive decree at the behest of the most hardline elements within the South Florida exile community — toughened up the travel rules in an effort to deprive Cuba’s communist regime of dollars.

Among other things, it changed the regulations to allow family visits once every three years instead of once a year; restricted those visits to immediate family members (excluding aunts, uncles, nieces, nephews and cousins) and severely limited the length of visits and amount of money that could be spent during the visits.

As a result, in 2008 Marazul processed just under 15,000 Cuba-bound passengers, compared to 45,000 to 50,000 in 2003, the year before the new regulations took effect. “Since the regulations were enacted, it’s created a boom in illegal travel to Cuba,” said García, who was born in Cuba and left the island with his parents at the age of 10.

“When you consider the need for families to see each other, it was obvious that people were going to violate the regulations — either by going through a third country, or abusing the different types of travel licenses available.”

For now, said García, Marazul has 30-40% of the legal market. “Before 2004, we probably had close to 25% of it, but now the legal market is much smaller.” He added: “Marazul does everything legally and we comply with all U.S. regulations, so it’s been very hard for us to survive — but we were able to do it. Because of the fact we’ve been around for so many years, people trust us.”

With three retail offices in Miami and one in New Jersey, Marazul not only uses its own charter but buys space from the other six companies. It also organizes flights to Nassau, Cancún, Toronto and Montreal for passengers who already have licenses to travel to Cuba.

Besides Miami-Havana flights Fridays and Sundays, Marazul also offers direct flights on Saturdays between Miami and Camagüey. Marazul charges $519 round-trip to Havana, and $599 round-trip to Camagüey.

María Teresa Aral, vice-president of ABC Charters, was rather cautious in her assessment of the “what-if” potential awaiting her troubled industry.

“If Obama issues an executive order to lift the travel restrictions [for Cuban-Americans], we would go back at least to the levels we were at in 2004,” she said.

“Hopefully, we’d be able to hire more employees, provide more service and reunite more families. But to surpass 2004 levels, Cuba would have to lift some of its own restrictions.”

Aral said the Cuban government prohibits any citizen who left the island illegally after September 1994 to return for a visit. That’s apart from the U.S. government severely limiting who can fly to Cuba and for how long.

“A combination of both [restrictions being eliminated] would really cause a big boom,” she said. “A lot of people would be able to visit their relatives. For example, my daughter has not been back since 2003, because all we have left in Cuba are aunts and cousins. So she is not allowed to go. Before that, we used to take a long weekend and visit our families.”

ABC, which used to offer eight flights a week, now flies five times a week to Cuba. Her company operates two American Eagle flights and one Boeing-737 to Havana, and one American Eagle and one Boeing 737 to Holguín.

That translates into 245 potential seats weekly to Havana, and 200 slots for Holguín — except these days, Aral can’t fill her planes. She charges $509 for round-trip tickets to Havana, and $594 for airfare to Holguín.

Aral told CubaNews that after the 2004 restrictions went into effect, she had to lay off seven employees and move from a 4,000-sq-foot warehouse to one half that size. “I’m not making all these huge plans, because until you see it, especially with the economy, you have to be very cautious.”

Cooper, whose airline offers daily flights from Miami to Havana at $425 round-trip, says Gulfstream is “running at around a 90% load factor.” Three days a week, the charter uses a 123-seat Boeing 737, and the other four days it flies a 30-seat Embraer-120.

Cooper said Cuban exiles and those traveling on religious or humanitarian licenses account for 70% of Gulfstream’s business; 25% are U.S. food executives going down to negotiate with Cuban officials, and the remaining 5% are politicians and State Department types.

“My best guess is that if Obama is going to do something, he’ll most likely do it before the Port of Spain summit. And then I’d expect business to ramp up fairly rapidly,” he said, suggesting that within 30 to 60 days traffic will take off because “you’re coming up on the end of the school year, and that’s when we have a bubble of activity to Cuba.”

Alvaro Fernández just wishes Obama would do something already.

“We continue to urge that the president fulfill his promise and let Cuban-Americans visit family members,” said Fernández, president of the Cuban-American Commission for Family Rights. “We are asking him to sign that decree tomorrow. And if he doesn’t sign it tomorrow, we’ll ask him to sign it the next day.”

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