Economic realities slow U.S. aviation ambitions in Cuba

Following an epidemic of delays and capacity reductions by American carriers, FedEx has filed for a six-month extension to inaugurate U.S.- Cuba scheduled, all-cargo air services. The Memphis-based integrator cited “inextricable dynamics, such as securing and establishing business relationships with Cuban service providers, in relation to air operations support services, customs clearance, and ground/delivery operations.”

Originally slated to start by April 15, 2017, FedEx is requesting more time to establish operations.

FedEx is the only U.S. cargo carrier with routes to Cuba, and troubled “business relationships” are a further indication that this may be the case for some time. While Cuba still operates under a planned economy dominated by state-run enterprises, private enterprise is taking off at the economic periphery. But the market in Cuba may not yet be able to support the sort of business that U.S. companies hoped for when the market opened.

John S. Kavulich, president of the U.S.- Cuba Trade and Economic Council, explained that there was a simple “lack of demand,” and noted that the latest delay from FedEx was “terrible optics” for trade relations, just as President Trump formulates his administration’s policies between the two countries. “It’s not the market U.S. companies would like to see,” Kavulich concluded.

The Cuban government has remained silent on the matter so far, but there is little evidence that the communist country is going out of its way to facilitate air cargo and general aviation interconnectedness with its northern neighbor.

The US Department of Transportation (USDoT) mandated that FedEx inaugurate its U.S.- Cuba air services within 90 days of its requested Jan. 15, 2017 start-up date, or by April 15, 2017. However, FedEx has now requested that its U.S.- Cuba air services start-up date be extended until Oct. 15.

Those interested in learning more about airfreight in 2017, should join us at Cargo Facts Asia in Shanghai, 25 – 26 April.  To register, or for more information, go to CargoFactsAsia.com