A 50-year wait comes to an end, with U.S. carriers American Airlines Group Inc. AAL and JetBlue Airways Corp. JBLU commencing flights to Havana, Cuba. American Airlines was the first U.S. carrier to operate a commercial flight to the Cuban capital in over five decades, followed by JetBlue. The American Airlines flight was from Miami, while the JetBlue flight took off from New York’s John F. Kennedy International Airport. Both flights have already landed in Havana.
Launch Coincides with Cuba Mourning Fidel Castro
The commencement of direct flights to Havana comes at a time when Cuba is mourning the death of its former leader, Fidel Castro. We remind investors that diplomatic ties between the nations were severed by the U.S. in 1961 after Fidel Castro overthrew the Cuban government to set up a socialist state and in the process started to establish strong relations with the erstwhile Soviet Union. In late 2014, President Obama called for the restoration of diplomatic ties with the nation after consulting his Cuban counterpart Raul Castro (Fidel Castro’s brother).
U.S. flights to other Cuban cities are already in operation, following the decision of the U.S. Department of Transportation (DOT) to authorize six U.S.-based carriers to operate scheduled flights to nine second-tier Cuban cities. After the announcement in June this year, the first commercial flight to Cuba from the U.S. was operated by JetBlue.
However, the approval to fly to Havana came two months later – in August. The Havana routes were highly in demand among U.S. carriers as they collectively applied for the approval to operate nearly 60 flights to Havana on a daily basis. The agreement allowed for only 20 daily roundtrip flights between the nations.
On Aug 31, the U.S. DOT granted approval to eight carriers – Delta Air Lines DAL, American Airlines, United Continental Holdings UAL, JetBlue Airways, Spirit Airlines SAVE, Southwest Airlines Co. LUV, Alaska Air Group ALK and Frontier Airlines – to operate direct flights to Havana. American Airlines was the biggest winner as the carrier gained approval to operate 35 weekly flights. All the above-mentioned publicly traded carriers carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
With American Airlines and JetBlue having already commenced flights to Cuba, the other carriers are expected to follow suit. The top line of carriers should benefit significantly from operations to the new destination as Havana is a favorite tourist spot.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Zacks Investment Research