LAX
Los Angeles World Airports
March 1, 2016
LAX
LA/Ontario
Van Nuys
Ms. Susan Kurland
Assistant Secretary for Aviation
and International Affairs
U.S. Department of Transportation
1200 New Jersey Avenue, S.E.,
West Building Ground Floor, Room W12-140,
Washington, D.C. 20590
City of Los Angeles
EricGarcetti
Mayor
ALLOCATIONPROCEEDINGDOCKET
RE: 2016 U.S.-CUBAFREQUENCY
DOT-OST-2016-0021
Board of Airport
Commissioners
Sean0. Burton
President
ValeriaC.Velasco
VicePresident
JefferyJ. Daar
GabrielL. Eshaghian
BeatriceC.Hsu
NolanV. Rollins
A. Telles
Dr.Cynthia
DeborahFlint
Officer
ChiefExecutive
Dear Assistant Secretary Kurland,
I am writing in support of the selection of Alaska Airlines to provide two daily
nonstop scheduled flights between Los Angeles International Airport (LAX) and Cuba.
The bilateral memorandum of understanding with Cuba and the resumption of
scheduled commercial service between our two countries is an exciting moment in
aviation history. In order to maximize public benefit, a gateway from the western U.S.
must be selected. We further believe with its large population and community of
interest, LAX is the logical selection to serve as the U.S. West Coast gateway to Cuba.
Los Angeles World Airports (LAWA), the City agency that owns and operates LAX, is
pleased to submit this letter of support imploring the U.S.DOTto strongly consider
allocation of nonstop roundtrip frequencies to LAX as proposed by Alaska Airlines.
LAX serves both the second most populated market in the U.S. and the metropolitan
area with the fourth largest Cuban American population. In addition, our market is
served currently with weekly charter flights to Havana. Securing nonstop service to
Cuba would open up convenient access to the traveling public including the large
local Los Angeles market and Western U.S. destinations.
As the third busiest passenger airport in the U.S., LAX acts as a critical gateway on a
number of levels. Latin America and the Caribbean are an important region to Los
Angeles and there are strong historic, cultural and economic ties. The opening of new
routes to South and Central America over the last few years illustrates LAX's strong
history of success as the primary western U.S. gateway to Latin America.
1 World Way Los Angeles
California
90045-5803
Mail
P.O.Box 92216
Los Angeles
California
90009-2216
Telephone
310-646-5252
Internet
www.lawa.aero
February 29, 2016
Ms. Susan Kurland
Assistant Secretary for Aviation
and International Affairs U.S. DOT
1200 New Jersey Avenue, S.E.,
West Building Ground Floor, Room W12-140,
Washington, D.C. 20590
RE: 2016 U.S.-CUBA FREQUENCY ALLOCATION PROCEEDING DOCKET DOT-OST-2016-0021
Dear Assistant Secretary Kurland,
On behalf of the Los Angeles Tourism and Convention Board, I am writing in support of the
request from Los Angeles International Airport (LAX) to receive nonstop service to and from
Cuba. After 50 years, we are excited that scheduled service between Cuba and the U.S. will
resume as a result of the signing of a bilateral memorandum of understanding last month. We
believe that Los Angeles with its large and diverse population and strong international business
ties would be the most logical choice as the U.S. West Coast gateway to Cuba.
Our business and travel community join with me in encouraging the U.S.DOT to strongly
consider allocation of nonstop roundtrip frequencies to LAX. Today, LAX is served with weekly
charter flights to Havana. Los Angeles is the second largest market in the U.S and boasts the
fourth largest Cuban American population in the U.S. Securing nonstop service to Cuba would
provide convenient access to the robust California market and all Western U.S. destinations.
Latin America and the Caribbean is an increasingly important region to Los Angeles and there
are strong historic, cultural and economic ties. Over the past few years, Los Angeles has
benefited from new routes to South and Central America and based on this strong success, Los
Angeles has become the primary western U.S. gateway to Latin America.
We understand that both Alaska and American airlines are submitting applications for
scheduled service, and we strongly support their service proposals. Alaska Airlines, a carrier
serving the market since 1985, is committed to LAX and has grown rapidly, particularly in Latin
markets over the last decade and is proposing daily service to operate a Los Angeles – Havana
route. American Airlines is equally important the largest carrier at LAX with a long history in the
market and has demonstrated their interest in Cuba by operating charter operations, and is
adamantly pursuing scheduled service.
As the western United States’ largest market and number one international airport, LAX is the
logical choice for expanded service from Cuba to the western U.S. We stand in full support of
the request from Los Angeles International Airport to bring scheduled service between Los
Angeles and the Cuban people.
Sincerely,
Ernest Wooden, Jr.
President & CEO
Los Angeles Tourism & Convention Board
BEFORE THE DEPARTMENT OF TRANSPORTATION
WASHINGTON, D.C.
2016 U.S.- Cuba Frequency
Allocation Proceeding
Docket DOT-OST-2016-0021
ANSWER OF LOS ANGELES WORLD AIRPORTS, OPERATOR OF LOS ANGELES
INTERNATIONAL AIRPORT, IN SUPPORT OF NEW SERVICE TO CUBA
Communications with respect to this document should be addressed to:
Ms. Deborah Ale Flint
Executive Director
Los Angeles World Airports
One World Way
Los Angeles, CA 90045
[email protected]
Mr. Samson Mengistu
Chief Operating Officer
Los Angeles World Airports
One World Way
Los Angeles, CA 90045
[email protected]
Mr. Ernie Wooden
Chief Executive Officer
Los Angeles Travel,
Convention and Visitors
Office
333 S. Hope Street
Los Angeles, CA
[email protected]
March 2, 2016
1
Los Angeles World Airports (“LAWA”) and its partner the LA Tourism & Convention
Board, support the service proposal applications of Alaska Airlines and American
Airlines to start nonstop service from Los Angeles International Airport (“LAX”) to
Cuba. LAWA is a City of Los Angeles Department that owns and operates a system of
three airports including LAX, LA/Ontario International Airport (“ONT”) and Van Nuys
Airport (“VNY”).
LAWA and Los Angeles Tourism strongly believe that resuming nonstop scheduled
service between the U.S. and Cuba will provide great opportunity in economic, cultural
and social development between both countries. It is vital all U.S. regions should
receive access to Cuba allowing as much benefit as possible to the traveling public.
Although a large population of Cuban Americans reside on the east coast with close
proximity to Cuba, there are also important populations and market demand in the
Western U.S. that should share in the access to Cuba. LAX is the logical gateway to
provide these connections. Proposals for nonstop service between LAX and Cuba
should be considered a priority for the following reasons:

LAX serves the 2nd most populated region in the U.S. and its local market will
provide access to Cuba for a considerable number of passengers

Los Angeles has the 4th largest U.S. Cuban American population and these
ethnic ties are important to the successful development for new service

LAX is the largest gateway airport in the Western U.S. and serves as the
primary connecting point for many Latin American markets

Los Angeles’ estimated passenger demand is sufficient to support two daily
nonstop flights

Los Angeles has one of the largest Latin populations in the U.S. and there are strong
ties and communities of interest between Latin countries.

There are strong ties between California and Cuba in areas of academic
programs/research, film and arts industry and agriculture. Having nonstop access
will strengthen these links and develop further benefits to the U.S.
1
LAX is the third (3rd) busiest passenger airport in the U.S. serving 74.9 million
passengers in 2015 1. It is also the largest gateway airport in the Western U.S. and serves
Greater Los Angeles, the second (2nd) most populated metro area in the country.
Exhibit 1
2014 Metropolitan Area Population (000s)
Note: Combined Statistical Area Populations
Source: U.S. Census, 2014 Estimates
Cuba is the largest island in the Caribbean with a population of over 11 million with 10
cities spanning an area the size of Pennsylvania. {Exhibit 2}
Exhibit 2
VRA
HAV
SNU
CCC
CFG
CYO
CMW
HOG
MZO
1
Airport records, LAWA
2
1
SCU
Cuba is also the closest Caribbean Island to the U.S., with its northern most city, Havana,
located approximately 90 miles from Florida. Given its size and close proximity, it is no
surprise there are almost 2 million Cuban Americans 2 in the U.S., many with strong ties
to the country and the majority only one generation removed from their ancestors.
LAX handled over 5 million O&D passengers in Latin America 3 in the most recent 12
months, an increase of over 5 percent in the last year 4. It is an important and growing region
averaging 4 percent growth in demand annually since 2010. Within Latin America, the
Caribbean has grown the fastest with an almost 7 percent increase in passenger demand in
the last year4.
Excluding Mexico service, LAX has weekly flights to nine Central
American/Caribbean markets including one weekly charter operation to Havana, Cuba that
restarted December 12th, 2015 {Exhibit 3}.
Exhibit 3
Weekly Departures: LAX – Central America/Caribbean
Source: Worldwide flight schedules; MBJ restarted service in December 2015; Havana is charter only
The response to Latin America/Caribbean scheduled service has been strong. In addition,
LAX service to Central America is experiencing solid load factor performance averaging
80% for carriers serving the market (ranging from 72.5% and 87%) for the latest period
available 5.
2
U.S. Census, American Community Survey
Mexico, Central American, the Caribbean and South America
4
Passenger bookings, Sabre, Final 2010-YEOct2015
5 U.S.DOT db, T100international YEAug2015
3
3
Greater Los Angeles is home to the 4th largest Cuban American population in the U.S. with
over 63,000 residents 6 with ancestral ties to Cuba. {Exhibit 4}
Exhibit 4
Largest Cuban American Markets
Source: U.S. Census 2014, MIDT passenger bookings, YE October 2015
Under the existing U.S. travel restrictions, Cuban Americans can readily travel to Cuba
and increasingly more trips overall are occurring since the Obama Administration
announced plans to normalize relations with Cuba in December 2014. In the first half of
2015, U.S. visitation was up between 36 to 54 percent accordingly to recent estimates 7.
Clearly the interest to experience Cuba is strong and its expected to increase as the new
aviation memorandum of understanding goes into force.
Charter service between LAX and Cuba has operated inconsistently for over 15 years and
has recently returned with Saturday service by American Airlines 8. However, the majority
of the charter capacity is concentrated in Florida, making the journey a long inconvenient
trip for Southern California and West Coast passengers wanting to access Cuba. In
US Census, American Community Survey, 2014, MIA, NYC and Tampa are larger
Bloomberg, AP, NBC
8
December 12, 2015
6
7
4
addition, international charter is not a significant mode of access at LAX. In fact, less than
one percent of total international passengers travel on nonscheduled operations. In contrast,
Miami and Tampa have a different market profile with 6 and 12 percent of the passengers
respectively using charter flights, therefore Florida travelers expect this service option to
select destinations 9.
LAX – Cuba Market Demand Estimates
Since commercial scheduled service between the U.S. and Cuba has been non-existent for
the last five decades, there is essentially no published data available summarizing typical
aviation activity including passenger demand trends, average fares and airline capacity.
There is limited non-scheduled data provided in U.S.DOT T100, however, this source does
not capture true demand or passenger flows beyond the point to point markets operated so
connecting traffic origin is unavailable. Given the lack of market data, substituting a proxy
destination with similar market characteristics is the most feasible option for determining
an estimate of U.S.-Cuba passenger demand.
Using the Dominican Republic and Puerto Rico as proxies, demand trends were analyzed
to help estimate market size. The Dominican Republic and Puerto Rico are two
Latin/Caribbean countries with strong ethnic populations in the U.S., desirable markets,
substantial levels of visiting, friends and relatives (VFR) traffic and a close proximity to
America. Travel propensities were developed between LAX’ O&D to the Dominican and
Puerto Rico compared to their ethnic populations and an average ratio was applied to the
U.S. Cuban population in Greater Los Angeles to derive an estimate for local passenger
demand.
9
USDOT T100international db YEAug2015
5
Based on the latest data available for the Dominican Republic and Puerto Rico, the average
travel propensity of 1.51 trips per resident resulted in an estimated traffic level for Los
Angeles Cuba at almost 96,000 annual passengers (131 passengers daily each way). While
first nonstop service usually results in 100 percent stimulation, a lower rate of 66 percent
was assumed to reflect constraints in the market (current hotel rooms). Incorporating the
service stimulation, the local Los Angeles market expands to almost 160,000 annual
passengers (218 PDEWs). {Exhibit 5}
Exhibit 5
Estimated Passenger Demand: LAX – Cuba
/1 Based on existing connecting passenger flows, similar distance LATAM markets
Source: U.S. Census 2014, MIDT passenger bookings, YE October 2015
LAX includes BUR, LGB, ONT, PSP and SNA O&D passengers
In addition to Los Angeles’ large local market of air travelers, connecting passengers would
contribute to the onboard traffic. An analysis of existing LAX - Latin America markets,
with virtually no competing service from another Western U.S. market exist 10, shows
10
Analysis excludes Mexico, comparing more similar distances to Cuba
6
approximately 25 percent of demand is generated from connecting passengers. As such,
the Los Angeles market estimate assumes a connecting traffic level of between 15 to 20
percent of the local LAX – Cuba traffic expanding the size to between 183,000 to 190,000
annual passengers (250 – 262 PDEWs).
Based on an assumed service pattern of a 160 seat aircraft operating year round flights, the
estimated Los Angeles demand could support two daily operations generating an average
load factor between 78 to 82 percent. {Exhibit 6}
Exhibit 6
Estimated Average Load Factors
LAX – Cuba Service Proposals
Los Angeles International Airport is pleased to be included in separate applications for
nonstop service to Cuba from Alaska Airlines and American Airlines. LAWA believe that
both carriers proposed service should be given serious consideration as the U.S.DOT
evaluates the highest and best use of the roundtrip slot opportunities.
Alaska is one of the top 10 busiest carriers at LAX operating 284 weekly departures to 12
domestic and 10 international destinations and carried almost 2.4 million passengers in
2015. Alaska began service to LAX in 1985 and designated the airport to focus city status
last decade, growing rapidly, particularly in Latin markets. In addition, Alaska Airlines
has and a network of 13 global partner carriers serving Los Angeles from all regions of
the world.
7
American Airlines is the largest carrier serving LAX with historic ties to the airport as well
as providing service to Cuba. American recently started Saturday charter flights to Havana,
helping LAX regain its unscheduled service link to Cuba. American is one of the leading
carriers at LAX with a long history serving the market and investing in its operations and
facilities. American Airlines has built a strong market presence and in 2015 carried over
14.4 million passengers at LAX. Its service at LAX offers 15 international markets
including Havana as well as seven others destinations in Latin America. In addition,
American flies to 46 domestic cities with over 1,300 total weekly departures providing
important passenger connections.
California – Cuba ties
Despite its distance, California has ties to Cuba that are unique and will serve to support
the development of scheduled nonstop service. These links include academics, film and
TV, grass-roots community development and agriculture. The University of California
began the UC-Cuba Educational Initiative in 2006. Centered at UC Irvine, this grass-roots
research effort includes contributions by faculty members and graduate Ph. D. candidates
whose work focuses on Cuba studies. Participants come from the nine campuses of the
University of California. The initiative has awarded 51 travel and research grants to 48
doctoral students from eight of the participating campuses in 14 different areas to conduct
research in Cuba, the only such program on Cuba-related research in the U.S. The program
includes academic research in history, the arts, social sciences and more recently hard
science and has been establishing ties at all levels with Cuban universities and research
centers. Separately, the University of California, Los Angeles (UCLA) has an active
summer undergraduate program in Cuba, as does UC Davis, UC Berkeley, California
State University Long Beach and CSU San Marcos. In addition, the Business School of
the University of Southern California, has had one of the longest residential programs of
MBA students in Cuba 11.
The film and television industry, which began in LA and continues to remain deeply
rooted as a core business of the city, has been trying to re-gain access to Cuba for
production work. As 2016 began, the government rules have loosened and Americans are
11
Dr. Ruben Rumbaut, founder UC-Cuba Initiative
8
now allowed to shoot scripted movies and shows in Cuba for the first time in half a century
and companies have either recently produced a show (Turner Broadcasting) are in the
middle of productions (Showtime) or are seriously considering projects set to film this
year (Universal Studios). 12
There are currently three California metro areas that have fostered sister city relationships
with Cuba including Richmond, CA and Regla, CU (1999), Oakland, CA and Santiago de
Cuba, CU (established in 2000) and Berkeley, CA and Palma Soriano, CU (2002). The
purpose of Sister City relationships is to exchange information, arts, culture, resources
and assistance between the two cities and foster ties that require travel between these city
pairs. California has more sister city relationships with Cuba than any other U.S. state. In
addition, Rialto a city based in Riverside County has publically stated they are evaluating
the possibility of a sister city relationship with Cuba 13.
Finally, the all important agricultural business is one of two export activities exempt from
the U.S. Cuba trade embargo starting in 2000 14, although special restrictions remain
regarding purchase, import and development support. Cuba relies heavily on imports of
food for its people and its expected to continue into the foreseeable future 15. Aside from
leading the nation in overall agricultural value, California produces almost half of all the
fruits, nuts and vegetables grown in the country, as well as a considerable share of
livestock and dairy 16. Agricultural trade with Cuba has been important and will continue
to develop and California will both contribute considerably and benefit from this nascent
exchange. As a recent example of the agricultural exchange between California and Cuba,
California winegrowers have been developing access to get their product into Cuba and
stimulating interest in the market for wine consumption. An historic California Wine
Symposium took place in early February 2016 sponsored by the Napa and Sonoma Valley
NY Times February, 12 2016
Sister-Cities.org; RIALTO: City eyes Cuban sister city friendship, Press Enterprise Jan. 28,
2015; other U.S.-Cuba Sister cities include Bloomington, IL, Madison, WI, Cambridge, MA,
Tacoma, WA, Mobile, AL, Sante Fe, NM, Pittsburgh, PA, Bloomington, IN, Boulder, CO.S
14
Trade Sanctions Reform and Export Enhancement Act (TSRA) authorized sales of certain food,
medicines, and medical equipment
15
U.S. Agricultural Exports to Cuba Have Substantial Room for Growth, June 22, 2015 Int’l
Agricultural Trade Reports
16
USDA California Agricultural Statistics, 2012 Crop Year Report
12
13
9
Vintners & Growers associations in an effort coordinated by U.S. Cava Exports 17. The
event fostered an exchange of learning about the current state of Cuba’s wine and
hospitality industry, while Cuban sommeliers, distributors, owners of paladares (local
private restaurants growing rapidly in the last two years), resorts and the Cuban Chamber
of Commerce heard about California’s winegrowing regions and appellations.
In conclusion, scheduled nonstop service between LAX and Cuba is a necessary
selection for the scarce slot exemptions, opening access to a large number of air
travelers and maximizing public benefit. We request the USDOT seriously consider
LAX as one of the strongest candidates for nonstop service to Cuba. The strength of the
local market as both the second most populated metro area in the U.S. and fourth largest
Cuban American population provides the necessary foundation for successful scheduled
development. Nonstop scheduled service to Cuba would provide convenient access to
the traveling public including connecting passengers from Western U.S. destinations.
As the third busiest passenger airport in the U.S., LAX is the best and most logical
option providing access for Western U.S. travelers. In addition, LAX is a gateway to
California, a state with considerable, existing ties to Cuba that nonstop scheduled air
service will require. In this unprecedented moment in aviation, Los Angeles
International Airport should receive serious consideration as a leading gateway airport.
17
California-based Cava Exports is an organization that has been working since 2014 to assist
California growers and other U.S. based companies to negotiate contracts to sell agricultural and
food products to Cuba
10
Certificate of Service
I certify that I have this date served this document on the following by sending a copy electronically in
accordance with the Department’s rules of practice.
[email protected] (DOT)
[email protected] (DOT)
[email protected] (American)
[email protected]
[email protected] (DOT)
[email protected]
[email protected] (DOT)
[email protected] (United)
[email protected] (FAA)
[email protected] (Dept. of State)
[email protected] (United)
[email protected] (United)
[email protected] (Dept. of State)
[email protected] (United)
[email protected] (Dept. of
Commerce)
[email protected] (AirlineInfo.com)
[email protected] (Allied Pilots
Association)
[email protected] FedEx)
[email protected]
[email protected] (FedEx)
[email protected] (Alaska Airlines)
[email protected] (Frontier)
[email protected] (Alaska Airlines)
[email protected]
[email protected]
[email protected] (Allegiant)
[email protected] (Delta)
[email protected] (jetBlue Airlines)
[email protected] (Delta)
[email protected] (Southwest Airlines)
[email protected] (Delta)
[email protected] (Southwest Airlines)
[email protected] (Spirit Airlines)
[email protected] (Delta MEC/ALPA)
[email protected] (Hawaiian)
[email protected] (Spirit Airlines)
[email protected] (Hawaiian)
[email protected] (Sun Country
Airlines)
[email protected] (Hawaiian)
[email protected]
(Hawaiian)
[email protected] (UPS)
[email protected] (UPS)
[email protected] (American)
[email protected] (American)
[email protected] (Virgin
America)
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[email protected] (Virgin America)
11