American Airlines' sales to Cubans off to a slow start

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Havana airport passengers
Travelers at the airport in Havana. Photo Credit: Shutterstock

As U.S. carriers begin service to Havana next month, American Airlines says Cuba sales are going slow.

"I think everybody is finding it a little difficult to sell in Cuba," Don Casey, the carrier's senior vice president of revenue management, said during the airline’s third-quarter earnings call Thursday.

American launched flights from Miami to the Cuban destinations Camaguey, Santa Clara, Cienfuegos, Holguin and Varadero in September. The carrier’s service from Miami to Havana (four flights per day) and Charlotte to Havana (one per day) launch on Nov. 28 and Nov. 30, respectively.

Without being specific, Casey said restrictions in Havana are slowing sales.

Still, American CEO Doug Parker said a gradual build-up for the carrier's Cuba service was anticipated.

"We're in this for the long haul. This is not something we didn't expect. It's a new market," Parker said.

American reported net income of $737 million for the third quarter, down 56% from last year. Much of the difference was the result of American paying $452 million in income taxes compared with just $16 million last year. Excluding one-time special items, the carrier earned $933.

American recorded third-quarter operating revenue of $10.6 billion, down 1.1% from last year. The decrease was driven by a 0.6% decline in the average price paid for a mile of flying.   

The carrier's operating expenses during the third quarter increased 5.2%, to $9.16 billion, as salary increases and employee profit sharing brought a 15.3% jump in labor costs. A 12.6% drop in fuel expenses countered that jump.

American recorded earnings per share during the third quarter of $2.80, beating analyst estimates by $1.23, according to Seeking Alpha. 

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