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Silver Airways, Frontier say Adios to Cuba

Silver Airways, Frontier say Adios to Cuba

Silver Airways went big in its application to serve Cuba. The airline applied for rights to fly to all 10 international airports on the island and received authorization to operate roughly 40 weekly flights, covering everything it wanted other than Havana. That all comes to an end in six weeks as the company is pulling out of the market. The final flights will operate on April 22, 2017. Frontier Airlines will also scrap its Havana service as of June 4, 2017.

Silver is not the first to suggest that the market has struggled to develop as expected. Frontier never did launch the flights it won rights to from Philadelphia and Chicago to the smaller airports. Both American Airlines and JetBlue have reduced frequencies (AA) and aircraft size (B6) in the face of lower than hoped demand. As part of its withdrawal Silver reiterated its view that the smaller cities represent too little demand to justify mainline jet service on a daily basis. The carrier believes its 34-seat SAAB turboprops running mostly less-than-daily frequencies are the right solution in many of those destinations. Indeed, it stated that the total number of passengers between the US and Cuba is “in line with what Silver originally projected, other airlines continue to serve this market with too many flights and oversized aircraft,” according to the Miami Herald. Of course, the other airlines believe they should be able to operate, too, so that view isn’t going to win many arguments where a vaguely free-market competition exists.

And there is no doubt that the capacity massively exceeds demand right now. Only the Havana slots were even contested (all requests for the other 9 airports were approved) and even those lacked solid evidence of demand. While enforcement has reportedly been lax for a while now there are still laws governing leisure travel by US citizens to Cuba. And there is a decent chance that the efforts towards normalization of relations will be scuttled by the new Executive Branch’s policies. Delta Vacations finally has an option that includes an appropriate selection of events to meet the necessary requirements but the booking process remains onerous; it can only be done over the phone and availability is limited.

Travelers can choose a guided experience to Havana and Varadero spanning eight days and seven nights or a shorter option of six days and five nights in Havana. Each experience will allow travelers to immerse themselves in the culture with activities around the country that include visits to historical sites like the El Morro Castle, Old Havana, Vinales and Finca La Vigia, Ernest Hemingway’s home. With these activities, participants will also have the opportunity to converse and interact with locals. For example, a Cuba history scholar will provide Cuba’s perspective on the Spanish American War of 1898 while walking the grounds of El Morro Castle.

That Eastern Airlines was excluded from any of the routes may prove to be its saving grace. Burning cash in an effort to compete for minimal passenger volumes in Cuba does not seem like a great way for the small carrier to build towards broader commercial service.

Upon return from my trip to Santa Clara on the inaugural flight last August my initial thought was that a business making it easy to do a weekend getaway to that city and meet the OFAC requirements would probably mint cash. I still think that’s probably true. Without significant structure on both the US and Cuban side the demand will remain low. Most American tourists will need more infrastructure than a typical DIY trip to Cuba can offer and negotiating the limited offerings on the Cuban side can be intimidating, especially with no cell service (only Verizon offers roaming but at $2.99/minute or $2.05/MB the rates are absurd) limited cell service (rates are generally $2/MB which is not conducive to much of anything) or credit cards and limited internet access.

I do believe that keeping the border open and further relaxing the restrictions on travel is smart business, smart politics and smart from a humanitarian angle as well. But we’re nowhere close to that yet and until some progress is made on that front the demand for travel will remain far too low to support the volume of flights operating today. Larger airlines can probably afford to lose money on Havana service for a couple years while squatting on those route authorities and waiting to see if things pan out. But airlines are not keen on long-term investments in new routes lately. More could change their mind.

More about Cuba

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Seth Miller

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I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, and LinkedIn.

7 Comments

    1. Thanks for that update…still not sure it is reasonable at $2/MB but I guess that’s better than nothing at all. :/

  5. I definitely couldn’t and can’t for now see a viable business plan for all those secondary markets. Even Havana seems overserved. There are definitely great reasons to visit Cuba, but it’s still not logistically ready for the mass market traveler. The American curiosity seekers and adventurers just aren’t enough people to sustain the kind of air service that has been on offer. The kinds of travel comforts and conveniences many people are used to at other destinations just can’t be had in Cuba yet except at sky high prices.

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