With portions of the Caribbean still struggling to recover
from massive hits by hurricanes Irma and Maria in September, U.S.-based
airlines flew nearly 10% fewer seats to the region in December than they had a
Still, the factors that airlines consider when deciding how
much to pare down service to islands and other locales that are reeling from
national disasters go well beyond merely dollars-and-cents considerations,
industry sources said.
"From the standpoint of airlines, they take the long view,"
said aviation industry analyst Bob Mann of R.W. Mann & Co. "They have
employees in the island. Those employees have families. The airlines have an
infrastructure in the island. They have account relations in the island. You
just wouldn't walk away from that. It's part of the social contract. It's not
just wretched capitalism."
According to the airline data analytics company
OAG, the most-damaged Caribbean islands are all experiencing substantial drops
in airlift this winter. Capacity to Puerto Rico was down 28.2% year over year
in December. In the U.S. Virgin Islands, it was down 47.2%. Dutch St. Maarten,
where the airport has been forced to move into temporary facilities while the
terminal is rebuilt, saw a decrease of 62.4%.
Other affected destinations, including St. Barts, Anguilla,
St. Kitts and Nevis and the British Virgin Islands saw air service declines of
between 11.6% and 32.8%.
OAG said it expects similar types of numbers in January and
Among specific airlines, American and JetBlue, the two
largest U.S. carriers in the Caribbean market, flew 15% and 11.8% less
capacity, respectively, year over year to the Caribbean in December. Delta's
capacity was down 17.1%, United's was down 25.7% and Spirit flew 25% fewer
One exception to the trend was Southwest, whose Caribbean
capacity was up 16.6%. The carrier has been broadening its Caribbean service
since moving into the international market in 2014.
The storms and subsequent drop in service to affected
markets have had a less consistent impact on prices. According to Hopper, an
app that tracks airfares for price-conscious shoppers, fares out of the U.S.
market were down 22.3% during the Dec. 16 to 25 holiday period for San Juan and
down 23% for St. Croix, for example. But prices to St. Thomas were up 26.6%,
and prices to St. Maarten were 36.9% higher.
Hopper measures prices based on what a traveler buying
airfare that is cheaper than the fares purchased by 90% of travelers would pay.
Mann noted that during the period when a destination is
rebuilding from a hurricane, the nature of its travelers changes. Tourists make
up a smaller portion of the market share, while higher-price-point business
travelers, notably contractors, make up a larger portion of the market.
Capacity reductions can also serve to drive up an airline's yield, even when
flying to a storm-ravaged destination.
Eric Zipkin, who owns the small operator Tradewind Aviation
along with brother David, said that in the immediate aftermath of Irma and
Maria, the publicly owned U.S. airlines responded to strong shareholder
pressure to cut capacity to affected islands. But shortly thereafter, they
began adding it back, he said.
Tradewind has made similar calculations. The carrier
typically flies as many as 40 to 50 frequencies during the winter months from
its Caribbean base in San Juan to St. Barts, Antigua, Nevis and Anguilla using
eight-seater Pilatus PC-12 aircraft. This year Tradewind had hoped for a boost
from a codeshare agreement on the St. Barts, Antigua and Nevis routes that it
entered into with United in October.
Instead, Tradewind reduced its Caribbean
capacity year-over-year by 31.7% this December and reallocated some of its aircraft to its
Eric Zipkin said that Tradewind won't fly to Hurricane
Irma-ravaged Anguilla at all this winter, a route that normally would represent
about 5% of its Caribbean frequencies.
On the other hand, he said, Tradewind has high hopes for St.
Barts this winter, even though the eastern Caribbean destination, a
favorite of wealthy travelers, was pummeled by Irma.
Flights from San Juan to St. Barts then on to Antigua
typically make up 90% of Tradewind's Caribbean frequencies, and the carrier
expects to be flying between 70% and 80% of last year's capacity to St. Barts
in February and March.
David Zipkin said, "We are spending a great deal of
effort to educate both the travel industry and the consumer that certain
islands are completely fine, like Nevis and Antigua, and that even some islands
that were hit hard are recovering very quickly, like St. Barts."
Echoing Mann's comments, the Zipkins said they have very
much taken the long view when making decisions about how to adjust flying
schedules in response to the hurricanes.
"It is immensely important, both from a humanitarian
standpoint and also from a business standpoint," Eric Zipkin said. "Caribbean
destinations survive on critical mass. If it gets below a certain point, there's
not enough business for restaurants. As restaurants close, there's less reason
for tourists to come. So when you have something like a hurricane strike, it's
really important to maintain enough of that critical demand as possible."