American Airlines Set To Gain From Havana Flights Allocation

American Airlines Group Inc. (NASDAQ:AAL) is expected to retain its position as the leading U.S. Airlines operating flights between Cuba and the U.S. In a favorable development for the company, the U.S. Department of Transportation (DOT) approved a second round of flight routes to Cuba and the airline has been tentatively given the right to operate five daily flights to José Martí International Airport (HAV) in the Cuban capital of Havana.

The U.S. and Cuba have been working on renewing ties of late. The opening up scheduled service between the two nations after almost fifty years marks another important milestone in this regard. American Airlines will now operate four flights from Miami International Airport (MIA) and one from Charlotte Douglas International Airport (CLT) to HAV.

Details of Service Expansion

American Airlines has been operating chartered flights between the U.S. and Cuba for over 25 years. Hence, the airline is well accustomed to the operational aspects in Cuba and is the leading service provider to Miami-Dade County which houses almost half of the Cuban-American population.

American Airlines expects to receive the final decision later in July. Thereafter, the airline will start selling tickets for the new flights. Boeing (NYSE:BA) 737-800 aircraft and Airbus A319 aircraft will be used to operate flights to Havana from Miami and Charlotte, respectively. The flights are expected to start operating in November this year. With the new flights, American Airlines will now be operating 13 daily flights to six destinations in Cuba.

In June, American Airlines was awarded the rights to begin flight services to five Cuban cities – Camaguey, Cienfuegos, Holguin, Santa Clara and Varadero. American Airlines’ inaugural flight service is slated to start from Sep 7 from Miami to Cienfuegos and Holguin. This will be followed by flights from Miami to Camaguey and Santa Clara on Sep 9 and flights from Miami to Varadero from Sep 11 this year. American Airlines expects to strengthen its existing presence with Cuba through its newest flight routes.

Other Airlines with Approval to Fly to Cuba

In addition to American Airlines, sporting a Zacks Rank #4 (Sell), seven other airlines have received approval for 20 daily flights to Havana in Cuba in the second round of allocations by DOT. These include Alaska Air Group Inc. (NYSE:ALK) , Delta Air Lines Inc. (NYSE:DAL) , United Continental Holdings Inc. (NYSE:UAL) , Southwest Airlines Co., Spirit Airlines Inc., JetBlue Airways Corp., and Frontier Airlines. In June, American Airlines, JetBlue, Southwest Frontier, Southwest Airlines Co. and Sun Country Airlines received approval to operate flights to nine secondary airports in Cuba.

Opening up of new travel routes is expected to help boost revenues for airlines amid various macroeconomic issues like currency fluctuations, terror attacks, low demand and Brexit, which are hurting margins and limiting growth.