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New Cuba travel rules boost traffic for charter airlines
CubaNews / May 2009

By Larry Luxner

Phones have been “ringing off the hook” at Miami’s ABC Charters Inc. ever since President Obama — on his way to the Summit of the Americas in Trinidad — vowed to abolish all restrictions on Cuban-American travel and remittances to the island.

While some restrictions still remain on the books, vice-president Maria Teresa Aral says Obama’s Mar. 13 relaxation of the once-every-three-years rule on exile travel to Cuba has been a significant boon for business.

“All our planes are flying down there full,” she told CubaNews.

For now, U.S. airlines are banned from operating regularly scheduled flights to Cuba, meaning aircraft chartered by federally licensed travel agencies will still be the only way for Cuban Americans to visit the island.

ABC is one of seven charter companies authorized to fly between the United States and Cuba. Nearly all those flights are to or from Miami International Airport, though two other cities — New York and Los Angeles — are also authorized to serve as points of entry or exit to Cuba.

Three other cities seek permission to offer charter flights to Cuba.

Armando García, president of Marazul Charters Inc., said that traffic in March and April was up 60% over January and February — even without unlimited travel to Cuba.

“We’re still waiting for these regulations to be issued relative to the Apr. 13 announcement. But the regulations that were changed Mar. 11 specify that people can fly once a year to visit family. So at this point, Cuban-Americans have to sign an affadavit stating that they will be flying to visit relatives.”

García said that in March, Marazul’s total capacity to Havana and Camagüey was 360 seats a week. That’s going up to 480 in May, when he adds a Boeing 737-200, and as many as 900 passengers in June and July, when an MD-83 aircraft holding up to 250 passengers will go into service.

By then, Marazul will be flying Thursdays, Fridays and Saturdays to Havana, and Saturdays to Camagüey, with the possibility of a second flight to Camagüey during the week.

“This will be a regular schedule,” he said. “If demand increases and we get landing permits, we might increase to extra flights during the summer.”

It’s unclear whether Marazul is allowing passengers to bring more than the 44 lbs. of luggage on its Cuba-bound flights.

“This is one of the points we’re expecting OFAC to clarify,” said García, referring to the Treasury Department’s Office of Foreign Assets Control, which enforces the embargo. “Family members can now bring more than 44 lbs. but that has to be clarified.”

García declined to say what Marazul’s annual sales are, though he did say “obviously our revenues are going to increase, and we’re hiring additional personnel.”

Thomas Cooper, president of Gulfstream Air Charter in Fort Lauderdale, says business is up 20-25% over earlier this year.

“The government hasn’t come out with any new rules or told us when they’ll take effect. So we are still operating under the same rules, when they changed in March from one trip every three years, to one trip every year. That give us a little bit of a boost.

“A lot of people who have pent-up desire to go to Cuba are going, and it’s perfectly legal now. If the rules were to stay where they are, it would level off. I don’t think demand would keep growing.”

Cooper, who has 20 employees, says his lawyer is checking in every day with OFAC.

In the meantime, Gulfstream flies daily from Miami to Havana, taking 120 passengers three days a week using a leased Boeing 737-200. The other four days, it uses a 30-seat Embraer-120 turboprop, for a total of 480 seats a week. In May, that will increase slightly to 500 a week, and in June to 600 seats.

“By then, the new law should be finished, and then we’ll see what the market bears,” said Cooper, declining to discuss revenues. “We’re modestly profitable, and we hope to continue that way.”

ABC’s Aral said she added three new employees even before Obama’s announced he would lift all remaining restrictions on Cuban-American travelers.

“Unlike some of my competitors, I did not add flights, but in June we'll be flying MD-83s [each capable of carrying 150 passengers] on Mondays, Tuesdays and maybe Wednesdays. On Fridays and Saturdays we’re upgrading from Boeing 737s to 767s,” meaning a jump from 145 to 225 passengers per flight.

ABC, which flies to both Havana and Holguín from Miami, has just began advertising a Miami-Havana round-trip price of $418.80 plus $51.20 tax — which she said is now the lowest in the business.

Los Angeles-based Cuba Travel Services Inc., which already flies from Miami to both Havana and Cienfuegos, plans to begin offering three flights a week to those cities Jun. 5 using MD-83 aircraft in addition to the ATR-72 commuter jets with 64 seats each.

CTS General Manager Michael Zuccato predicting a 40% jump in business in May-June, compared to the same period in 2008.

In addition to the Miami flights, CTS plans to resume Cuba service from Los Angeles. It had offered direct flights to Cuba from LAX for over four years, but stopped after the Bush administration cracked down on exile travel in 2004; the draconian measures also forced Marazul to stop flying from New York’s JFK.

“We were looking at opening up Los Ange-les when Obama changed the restrictions,” Zuccato said. “In California, unlike Miami, we have competition an hour and a half away. People could drive to Tijuana and fly from there to Havana via Monterrey. But now Cuba has halted all flights from Mexico because of the swine flu.”

Zucatto said at least 100,000 Cuban-Americans live in California, providing a ready market for charter flights.

At this point, he said, it appears likely that CTS will operate once a week between LAX and Havana, charging between $800 and $950 for a round-trip ticket. Zuccato said his company will lease a Boeing 737-800 or an Airbus 320 for the flight, which takes 5-6 hours.

Despite the rosy outlook, Aral said she’s not sure how many more people would travel to Cuba more than once a year, even though it's now completely legal to do so.

“At $500 a pop, plus whatever they bring to Cuba, it’s still not cheap to fly there,” she conceded. “I don’t know how often an individual can afford to go in this current economy.”

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