Air China well-positioned to be pioneer in Cuba

By Tu Lei Source:Global Times Published: 2016-3-24 20:18:01

Air Force One carrying US President Barack Obama makes its approach at the Jose Marti International Airport in Havana, Cuba on March 20. Since the US lifted of its 56-year embargo against Cuba in 2014, many airlines have been looking to expand into the island country. Photo: IC

After the US government lifted its 56-year embargo against Cuba in 2014, triggering a new round of investment on the island country, many US airlines have submitted applications to the US Department of Transportation to begin making commercial flights there.

In fact, before US airlines flocked to Cuba, Chinese carriers had already established a presence there. Air China started a direct route from Beijing to Havana at the end of 2015. The route, which flies three times a week, is the only direct route between the two countries.

United, American, Southwest, JetBlue and others have submitted letters urging the agency to approve as many as 20 daily round-trip flights to Havana and 10 daily round-trip flights to smaller airports around the country, according to media reports. The agency is expected to approve routes this summer.

As these US airlines fight over slots in Cuba, it makes one wonder what will be left for Chinese carriers.

By searching for flights from Beijing to Havana on ctrip.com, one of China's leading online traveling agencies, one can find a few decent options, including three flights from Air France, two from Russia, and one from Air China.

There are no direct flights from China to Cuba, and the longest flight takes 40 hours to reach the destination.

In the past, the US government not only prohibited American airlines from flying to Cuba, but they also refused to allow foreign carriers access to US airspace on their way to Cuba. Consequently, many flights to the island country had to make stops in France, Spain or Mexico on the way. The change will cut Air China's flight to Cuba to less than 20 hours.

However, Air China's route to Cuba has not performed well due to visa issues and because the flight has to stop in Montreal, Canada. Still, the airline remains confident in the route.

China Southern said it doesn't plan to start a route to Cuba.

Several Chinese companies have been considering entering the Cuba market, such as Suntime International Economic Trading Co, which will build a luxury hotel in Havana in a joint project with Cuba's state tourism agency, according to media reports.

Beijing Enterprises Holdings is planning a five-star hotel and golf course in Bellomonte, to the east of Havana, according to media reports.

Although some Chinese companies have been scrambling to enter Cuba, they will face new competition from US companies now that the two countries have re-established diplomatic relations. US companies are likely to set off a construction boom in Cuba.

In the year after the US government lifted its decades-old embargo in 2014, the number of overseas visitors to Cuba jumped 20 percent. The number of Chinese tourists visiting Cuba breached 25,000 in 2015, according to a CRI report.

In the first nine months of 2015, bilateral trade between China and Cuba leapt 57 percent year-on-year to $1.6 billion, according to China's Ministry of Commerce. Chinese exports to Cuba surged 82.4 percent to $1.33 billion.

It is hard to say how many years it will take airlines to put down roots in Cuba because a successful airline route depends on factors such as bilateral trade, passenger numbers and political stability.

Still, it's good to see that Air China, as a pioneer, is already standing on the frontier.

Posted in: Insight

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