How Will Your Travel Plans be affected by the Deal on Commercial Air Service between the United States and Cuba?

   After fifty years of embargoes and isolation, the U.S. is taking a new diplomatic approach toward Cuba and an agreement has been reached that includes commercial airline service between the U.S. and Cuba. That means Americans will finally be able to fly to Cuba from airports in the United States.

 

   This is a huge historical step, especially for airlines, in particular, American Airlines. It also presents innumerable business opportunities. 

 

    However, U.S. sanctions are still in place which prevent Americans from traveling as tourists to Cuba. Recreational time in excess of what would coincide with a full-time business schedule will not be permitted. Travelers to the island must adhere to guidelines for twelve categories outlined by the Treasury Department’s Office of Foreign Asset Control.

 

    Those flying into Cuba must explain the intent of their visit. Yet, guidelines are a little hazy as to who and how the activities of visitors will be policed and how strict the enforcement of the rules will be. A form must be filled out and submitted to the charter company and a visa must be obtained from the Cuban government for $75 before boarding the plane.

 

    Penalties for violating the Treasury travel rules are also unclear. But, banks, travel companies and other businesses have faced OFAC enforcement action for violating the U.S. sanctions on Cuba.  

 

   “There is enforcement but not that I’m aware of for individuals,” said Bob Guild, vice president of Marazul Charters in North Bergen, N.J. “Do you have enforcement in the United States worried about people flying to Cuba when you have free and open travel to Syria, China, Iraq, North Korea, Iran and all these other places?”

 

    The new agreement permits 20 daily flights to Havana and up to 10 flights to nine other international airports within Cuba. 

 

    Probably some time in mid-2016, service will commence, after the Department of Transportation outlines how airlines can apply for those 110 daily flights and then allot the number of origin cities and frequencies. Not until that process is completed will American airlines begin to sell tickets.

 

   What will the flight price range be like?

 

    At the moment, charter flights are in the range of $400 and up, depending on the departure city. So, scheduled flights should be considerably lower. Whenever a new route is launched, demand is generally stimulated, which brings down the fair in the beginning. Carriers like JetBlue are eager to get on the bandwagon and charter operators are expecting that scheduled services will help to curtail bureaucracy and expenses.

 

    Because there is already a huge demand for travel to Cuba with relation to the supply, this new consideration probably won’t affect the charter business.

 

    For example, activity at Marazul has jumped 45 percent in its non-Cuban sector. There has been an increase of 100 percent for 2016 which proves there is room for both parts of the air service.