Charter Companies Flying to Cuba Thrive
MIAMI — The crowd of Cuban-Americans pressing against the airport ticket counter scorned those on the other side. Only a handful of American charter companies have landing rights in Cuba, and with the new White House policy letting Cuban-Americans visit relatives there as often as they want, ticket prices have become political.
“I paid $600 for a 45-minute flight,” said Carelis Sabatela, in loud Spanish, before checking in with a cart of heavy luggage. “It’s very high, super excessive.”
Like many in line, she called for more competition, but as the current boom in reservations shows, this is not a normal business. Who flies and how much they charge is intimately tied to the 50-year feud between Cuba and the United States. Experts describe these charter companies as byproducts of a dysfunctional back-and-forth that has not ended — and that now promises to provide millions of dollars in profit to a politically savvy few.
“The system exists solely because the relationship between Cuba and the United States doesn’t exist in its normal form,” said John S. Kavulich II, a senior policy adviser for the U.S.-Cuba Trade and Economic Council, a nonpartisan group that tracks trade activity in Cuba. “You have an abnormal service environment directly because of abnormal relations.”
Today’s charter companies began in the late 1970s during a period of warming relations, and most owners figured that their role would be temporary. The companies survived not just because Fidel Castro and the American embargo kept larger carriers out; many of the owners have also played both sides, deploying money and favors under the cover of dual identities that let them connect with Cuban leaders one minute, Americans the next.
John Cabanas, of C&T Charters, is perhaps the least known but the most powerful owner in a group that includes Vivian Mannerud, who followed her father into the business after he was convicted in the 1980s of “trading with the enemy,” in part for taking four Pepsimachines to Cuba; and Francisco Aruca, owner of Marazul Charters, who sneaked out of a Castro-run prison dressed as a child, but now praises Cuba on his Miami radio show.
A large man, quick to laugh and partial to linen Guayaberas with a gold plane pinned to the collar, Mr. Cabanas, 66, grew up in Key West, Fla., but spent 28 years in Cuba. He says his company is the largest of the seven or eight that fly there regularly.
Certainly since the new White House policy was announced last month, business is booming. “We used to send 15,000, 16,000 people a year,” Mr. Cabanas said. “Now I’ll probably handle 40,000 or 50,000.”
He insists that his prices — though at least double the cost of flying to the Bahamas — are fair when seen in context. In his view, customers like Ms. Sabatela, who was traveling on a C&T flight to Camagüey, fail to appreciate the industry’s challenges.
The past decade has been especially tough. The cost of fuel and jet rentals have increased while the Bush administration’s tighter travel restrictions in 2004 halved the number of legal American visitors from a peak of 135,000 in 2000, according to the U.S.-Cuba Trade and Economic Council. The government has also demanded reams of paperwork from the charter operators, proving that they have complied with various rules — which led in part to a $125,000 penalty settlement that C&T paid in 1999.
The Cuban government has demands as well: it prohibits the charters from hiring in Cuba, and charges $100 to $133 per passenger for landing rights, baggage claim and other services.
Mr. Cabanas admits that the industry is “very controlled.”
“My business is business,” he said. “But it depends on politics.”
His office illustrates the point. In a back conference room, photographs on the walls show him with four very different leaders: Barack Obama, George W. Bush, Fidel Castro and Álvaro Uribe, the president of Colombia.
Since returning to Florida in the late ’90s, Mr. Cabanas has also spread more than $145,000 in campaign donations across the political spectrum. “Right now, I support Barack Obama,” he said, “even though I’m a Republican.”
Mr. Cabanas had just come from a Cinco de Mayo party at the White House, but his connections and charm have done nothing to alter the controversial basics of his business.
The industry “is in essence a protected monopoly,” Mr. Kavulich said. “There are a finite number of people in the marketplace, and you have to have the Cuban government’s authorization.”
Cuban officials, he said, want as few companies as possible, and “if they can’t Google you and find you’ve opposed the commercial, economic or political position of the United States, you’re not likely to do any business.”
That means approved operators earn a lot during open moments. A recent poll by Bendixen and Associates found that about 240,000 Cuban-Americans plan to travel to Cuba by the end of 2010.
If round-trip tickets continue to hover around $500, with a 10 percent markup, that would be around $12 million in profit.
In interviews, several charter operators described their flights as humanitarian and insisted that politics did not enter into conversations with Cuban officials.
They all oppose the embargo, which puts them squarely in line with the stated desire of Cuban officials, but also with a growing swath of the 1.2 million Cuban-Americans in the United States.
And yet, many here see the companies’ owners as relics of a past they would like to get beyond. For Cubans, the charters’ prices and profits are pinpricks in a wound that has not healed.
Conservatives still accuse the charters of being collaborators.
“They are a virtual cartel that control the travel sector from the U.S. to Cuba, charging egregious fees in collusion with Cuban authorities,” said Mauricio Claver Carone, director of the U.S.-Cuba Democracy PAC in Washington.
More moderate Cuban-Americans are only slightly kinder.
“Do they charge more than they should? They do,” said Andy S. Gomez, a senior fellow at the Institute for Cuban and Cuban-American Studies at the University of Miami. “Are there any other alternatives? None.”
Well, not yet, but momentum for broader changes in Cuba policy has been building. Last week, Orbitz, the online travel company, began offering a $100 coupon for a vacation in Cuba to everyone who signed an online petition urging leaders in the United States to give all Americans the freedom to visit.
Jose Fernandez, one of the dozens waiting here to board a C&T flight to Cuba, said he would welcome new alternatives. “The prices,” Mr. Fernandez said, “are out of balance with the moment.”