Last updated: 02:30 PM ET, Thu June 23 2016

Southwest CEO: Havana Is Key

Airlines & Airports | Josh Lew | June 23, 2016

Southwest CEO: Havana Is Key

PHOTO: Havana at dawn. (Photo by David Cogswell)

Southwest CEO Gary Kelly spoke Wednesday about his airline’s flights to Cuba. Though 90 slots have already been awarded, the Dallas-based low cost carrier is still waiting for news on the 20 slots for Havana, about which the DOT has still not yet made a decision.

The importance of Havana

“We’re ready to go. The other cities that we’ve bid for, the slots are all awarded at this point. But Havana is key, and hopefully we’ll hear something in July and we can get flights launched this year,” Kelly said during an appearance on CBS on Wednesday. 

Southwest is still competing with all three legacy carriers and rival JetBlue, among others, for the Havana slots. Both United and Delta have not even bothered to apply for slots at the nine other airports on the island, focusing all their efforts on Havana.

Already awarded two Cuba destinations

Southwest has applied for a total of nine slot for Havana’s José Martí International Airport. It wants to fly to Cuba’s capital from Fort Lauderdale (six slots), Tampa (two slots) and Orlando (one slot).

Southwest has already been approved for daily flights to Santa Clara and twice-daily flights to Matanzas, the airport that serves the resort destination of Varadero. These flights will originate in Fort Lauderdale.

READ MORE: Air Routes To Cuba: Which Carriers Won and Lost? 

The best option for the DOT?

Southwest has always been confident about its ability to succeed in the U.S.-Cuba market. In its application for Cuba slots, it claimed that it was better positioned than its rivals. “Southwest will almost certainly have the lowest South Florida-Havana fares of any applicant in this case. More than any other airline in this case, Southwest will successfully develop the new Havana markets, operate at high load factors, and bring the greatest air travel value to the U.S. consumer.”  

This argument speaks directly to the DOT’s statement that it will choose airlines based on which ones provide the most “public benefit.” Thus far, it seems like the DOT has been intent on spreading the slots evenly between airlines. Smaller airlines like Silver Air and Sun Country, for example, have been given slots to some of the nine other cities with international airports in Cuba.

Havana might prove different. Two major airlines, Delta and United, ignored the nine other airports and only applied for flights to Havana. The stakes will be much higher here than for any of the other slots. That is why the DOT is taking its time making its decision.

Who provides more "public benefit?"

In the bigger picture, the Havana decision will force the DOT to weigh in on low-cost carriers. Will they think that lower fares like those offered by Southwest and JetBlue provide more “public benefit” than full service carriers? Will full service airlines prevail because of their larger size and lobbying clout? Or will the Department avoid taking a stance on the issue by dividing the slots evenly between legacies and low cost carriers?

Kelly said that he hopes to get a decision on the Havana slots sometime in July, which would allow flights to take off in the late fall.

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