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Alaska Air Group (ALK) Subsidiary to Cease Havana Operations


Alaska Air Group Inc.’s ALK wholly-owned subsidiary, Alaska Airlines, has announced that it will discontinue service between Los Angeles and Havana, Cuba, primarily due to soft demand.

Around 80% of the passengers to Havana visited the place for people-to-people educational travel on U.S. allowance. However, President Donald Trump’s recent changes to U.S. policy have discarded such allowances. Coupled with a severe drop in demand since August, the airline was driven to take such a step.

The last plane on the Los Angeles-Havana route will ply on Jan 22, 2018. The carrier will redeploy the Boeing 737 aircraft, used to serve Havana, on the Seattle-Orange County, CA route where demand is higher.

With this move, the carrier joins other U.S. airlines, which are either reducing flights to Cuba or terminating the service entirely. Spirit Airlines SAVE, Frontier Airlines and Silver Airways have also ceased services to this destination. Moreover, the likes of American Airlines Group AAL and JetBlue Airways JBLU have trimmed their services to the nation.

This Zacks Rank #5 (Strong Sell) company began the Los Angeles-Havana flight on Jan 5, 2017. The carrier has launched 44 new routes so far this year and the numbers are expected to increase as per forecasts. The company expects growth of 7.2% this year. For 2018, the airline aims to add capacity in the existing markets and achieve approximately 8% network growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The airline's travelers with bookings to Havana post Jan 22 will be rebooked on another airline free of cost. Conversely, they may be offered a full refund.

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