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Net margin decreases as Cayman Airways faces new Cuba reality

“The Havana market for Cayman Airways is not as strong as it was, and it’s not expected to come back,” said Deputy Premier and Tourism Minister Moses Kirkconnell at a recent media briefing.

Changes in diplomatic relations between the United States and Cuba have had an impact on Cayman Airways’ bottom line.

Mr. Kirkconnell said what was once a cash cow for the national flag carrier, its service to Havana, has dropped off dramatically.

Cayman airways CEO Fabian Whorms gave Cayman 27 his take on the new Cuba reality.

“For a very long time we had a steady, heavy flow of traffic from Cuba to Miami and back over Grand Cayman,” explained Mr. Whorms.

He said Cayman Airways’ service to and from Havana was once so popular, the airline operated nine flights a week.

“These passengers were primarily Cubans who held Spanish passports which meant they could legally fly to and from the United States, so they did, because they had family in the United States and they used to travel with a lot of baggage,” he said.

Mr. Whorms said nowadays these customers have a multitude of direct options to reach the US, thanks to a thaw in diplomatic relations between the two countries starting in 2016.

The route saw a sharp decline by the end of that year, he said it’s responsible for a $5 to 6 million dollar reduction in the airline’s net margin.

“We reduced our capacity, so we’ve gone from having nine flights a week to now just having three flights to Cuba,” said Mr. Whorms.

For now, he told Cayman 27 three is the magic number for the Havana route. As for the future?

“You never know what will happen,” said Mr. Whorms. “While the whole series of events was unfolding, one of the things that we did not do was that we did not decide what exactly was going to happen, and what exactly we were going to do, we remained as nimble and flexible and continuously on top of the situation.”

He said the national flag carrier will try to stay nimble as it looks to find other ways to generate a similar degree of net margin.

“This is a huge challenge for us, it means the landscape has changed,” he said.

Mr. Whorms said even with the challenges presented by the new Cuba reality, and the airline’s response to those changes, 2018 will be a year of celebration. Not only is it Cayman Airways’ 50th anniversary this year,  he said the first of the new 737 8-max aircraft is expected to enter service by year’s end.

About the author

Joe Avary

Joe Avary

Joe Avary has been with Cayman 27 since 2014. He brings 20 years in television experience to the job, working hard every day to bring the people of Cayman stories that inform the public and make a difference in the community. Joe hopes his love for the Cayman Islands shines through in his informative and entertaining weather reports. If you have a story idea for Joe or just want to say hello, call him at 324-2141 or send an email to josephavary@hurleysmedia.ky

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