American Airlines Thinking 13-1 Flight Schedule Decision Against Partner JetBlue Is Fair. JetBlue Feels Otherwise. Might U.S.-Cuba Arrangement Be Expanded? More Competition, Lower Airfares?
/Dallas Business Journal
Dallas, Texas
2 September 2022
American Airlines, JetBlue fight over plans to expand service to Cuba
American Airlines wants to operate two additional daily flights between Miami and Havana, Cuba, but JetBlue is trying to throw a wrench into those plans.
By Holden Wilen- Staff Writer
American Airlines Group Inc. and JetBlue Airways Corp. have engaged in a public spat over routes to Cuba as both companies look to expand service to the Caribbean nation.
Fort Worth-based American filed a request with the U.S. Department of Transportation last month requesting the agency expedite approval of the carrier’s application to operate two additional daily flights between Miami and Havana, Cuba. If approved, American would operate 14 daily flights between Miami and six Cuban cities. But New York-based JetBlue has thrown a wrench into American’s plans, submitting an application of its own to operate one non-stop trip on Saturdays between Fort Lauderdale, Fla. and Havana. The Transportation Department set a limit of 20 daily round-trips to Havana, meaning the airlines have to compete for the available slots.
The standoff between American (Nasdaq: AAL) and JetBlue (Nasdaq: JBLU) comes as the two carriers prepare to defend a codeshare agreement for their Northeast Alliance in federal court next month. Some industry observers and insiders have doubts about the future of the partnership because of JetBlue’s pending acquisition of Spirit Airlines Inc. (NYSE: SAVE).
American already operates six daily flights to Havana and earlier this summer received approval to fly daily to five other Cuban cities. The company began pushing for the additional Havana flights in early 2020 after JetBlue forfeited some of its slots, but that request came before Covid-19 and the implementation of travel restrictions. JetBlue currently operates three flights each day between Fort Lauderdale and Havana, except on Saturdays when frequency limitations have relegated carriers to operate only one single flight. JetBlue proposes the additional Saturday flights begin service in December using 162-seat Airbus A320 aircraft.
In its request, American argued that the additional frequencies would “maximize public benefits by growing capacity at the gateway with the greatest demand for U.S.-Havana travel while enhancing connectivity using American’s leading network at Miami.” JetBlue argues that its request should be favored over American’s in order to promote competition. In addition to American’s six Miami-Havana flights, Delta Air Lines and Southwest Airlines operate a combined five flights between South Florida and Havana. “In these circumstances, there is no public interest rationale for awarding American additional frequencies while such competitive lopsidedness exists,” JetBlue said in its Aug. 22 letter to do the USDOT. “Of all U.S. carriers, low-fare JetBlue currently holds the authority to offer the fewest number of South Florida-Havana flights on Saturdays, one of the most important days of the week for Caribbean air travel.”
JetBlue also argued American’s application should be considered “stale and moot” and noted previous concerns the USDOT has raised about competition. The agency awarded American one additional Miami-Havana frequency in 2018 when it sought to expand service at the time. “DOT’s logic that American has too many Miami-Havana frequencies was compelling when American had four flights,” JetBlue said, “and is even more compelling now that American has six flights, is seeking to add a seventh and eighth flight, and now holds broad flexibility to downgauge all potential eight flights to small regional aircraft, an ability it did not have when DOT initially made its first Havana frequency awards.”
The Fort Worth-based carrier refuted JetBlue’s claims about wanting to use regional aircraft for flights to Cuba and said its proposed expansion of service will provide the most benefit to the public. American plans to operate the additional Saturday frequency with its 172-seat B-737 aircraft, according to an Aug. 31 letter to the USDOT. American took a shot at JetBlue, in mentioning it “has demonstrated its longstanding commitment to serving Havana by offering multiple daily frequencies, and never having returned such frequencies.”
“JetBlue rehashes its well-worn complaint about a so-called ‘competitive disadvantage’ that is of its own making,” American said in its letter. JetBlue operates the fewest flights between South Florida and Havana on Saturdays because it prioritized obtaining a Boston–Havana Saturday frequency and abandoned the 14 Havana frequencies in question, American said.
American proposed a possible compromise to the USDOT: award JetBlue the Saturday-only frequency and allow American to have the other 13 uncontested frequencies. In a statement to The Dallas Business Journal, JetBlue repeated many of the arguments from its application and said it “remains committed to providing our award-winning service and low fares on routes between” the U.S. and Cuba. The company did not comment on American’s proposal and said the conflict is unrelated to the Northeast Alliance. “An award of one additional Saturday-only frequency to JetBlue would introduce additional competition and help create a more competitive balance in the important South Florida-Havana market,” the company said in its statement. American did not respond to a request for comment.
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American Airlines Requests Additional Flights From U.S. To Cuba; Nearing Use Of All Authorized Allocations. Might Other Airlines Object? Re-Negotiate U.S. Arrangement With Cuba? August 16, 2022
