Last updated: 02:10 PM ET, Mon February 15 2016

U.S. and Cuba Finally Set Commercial Air Travel Deal in Motion

Airlines & Airports | Josh Lew | February 15, 2016

U.S. and Cuba Finally Set Commercial Air Travel Deal in Motion

The U.S. has been inching towards normalized relations with Cuba. Rumors that airlines would soon be able to fly to the Caribbean island nation from the United States started even before President Obama and Raul Castro chatted together at the Summit of the Americas in early 2015. 

A U.S.-Cuba air travel pact was agreed upon on Dec. 16 of last year. Though it meant that flights between the two former adversaries were on the horizon, no one was quite certain when the first official U.S.-Cuba commercial plane would actually land in Havana.

Taking the next step

The two countries will now take one step closer to that first commercial flight. U.S. officials will travel to Havana on Feb. 16 to officially sign the agreement that was hashed out in December. This will put the next phase of the process into motion. The first commercial flight is still probably at least six months away, but the roadmap for getting to that point is a little more evident now than it was before. 

After the ink is dry on the agreement, airlines will have two weeks to submit applications for U.S.-Cuba routes with the U.S. Department of Transportation. The DOT will most likely take its time when deciding which carrier gets which route. Demand will be the highest on the U.S.-Havana routes, which can have up to 20 daily flights in all according to the agreement. The other 90 routes (10 each to nine other airports on the island), will also be up for grabs. 

But not the last step

Airlines will also have to get approval from Cuban authorities and obtain space at Cuban airports. A recent tweaking of the current trade embargo rules (still in place until they are removed by Congress), does allow airlines to legally enter into agreements for airport space and code-sharing with Cuban businesses, even if they are state-owned. The question is how easy Cuban authorities and businesses will make the process for the incoming U.S. airlines. Will they try to streamline everything or will there be an excessive amount of red tape that could delay the first flights from the United States?

First commercial flights are on the horizon

Even with all these variables still in play, industry experts expect that the first Cuba-bound flights will be in the air sometime in 2016 - perhaps as soon as the early fall. 

Though the Obama Administration has been changing the rules to allow more people to legally go to Cuba, general mainstream tourism activities are still not allowed for U.S. citizens. That ban can only be overturned by Congress, which is not likely to make such a change until after elections. If and when this happens, demand for Cuba routes should skyrocket. 

According to the DOT, US Transportation Secretary Anthony Foxx and Assistant Secretary of State Charles Rivkin will be the two main officials who will represent the U.S. in Havana on Tuesday. 

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