Southwest Doesn’t Like American Airlines’ Move on Cuba Flights
As was announced in a filing last month, American Airlines filed to end its route from Charlotte to Havana and replace it with a flight from Miami to Havana. On October 10, 2018, Southwest airlines submitted a response to American Airlines’ request, saying that it did not support a change in the way that flights to Cuba are granted by the Department of Transportation.
American Airlines’ case to the Department of Transportation was seeking “flexibility” in how airlines are able to use the routes they’ve been granted by DOT. Under the current rules that have been in place since commercial flights from the United States started again under the Obama Administration, American Airlines would be forced to give up the slot that it has from Charlotte to Havana and then all airlines would be able to compete for a new Miami to Havana route.
Under these rules, American could potentially lose the route to another airline, which is why it filed for a rule change to diverge from this rule. American currently has five flights between Miami and Havana. If they were granted this rule change, they would have six.
Now fast forward to Southwest Airlines’ response that was filed late last week. Southwest’s filing said, “In essence, American’s motion would substitute its own self-interest for the Department’s public interest decisions. The Motion should be denied.”
Southwest argues that this gives an unfair advantage to American because its making a decision to move from Charlotte, where the CLT-HAV only had a 55% load factor for the first half of 2018, and transfer it to what is a more full load factor for AA. As there are only 20 flights allocated by the DOT, Southwest argues that this keeps it from this slot being competitively placed back in the market for all airlines to compete for the slot.
It should be noted that Southwest is definitely looking for a new slot. They openly say in the filing that should AA cancel the CLT-HAV route, Southwest would want to apply for the slot to fill a second flight from Tampa. If the rule change were approved, Southwest would not have the ability to do that. Southwest points out that AA sought a substantial amount of the initial 20 slots, requesting 12 daily frequencies, 10 of which would have been from Miami alone. Southwest was also granted Delta’s JFK-HAV flight because DOT did not think it would be advisable to put another slot in Miami, for competitive reasons.
It’s hard to see that DOT would grant this rule change, given the extent to which it has abided by the rules to, in its views, balance the market to Cuba. The rule change, if granted, could change the Cuba market significantly because it would allow airlines with slots to change their routings based on demand. Thus far, this seems like something he DOT has attempted to avoid.