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Alaska Air Group (ALK) to Initiate Flights to Havana Next Year


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Seattle, WA-based Alaska Air Group (ALK - Analyst Report) recently announced its intention to commence flights to the Cuban capital of Havana from Jan 5, 2017. Late last month, the carrier gained approval from the U.S. Department of Transportation (DOT) to fly to Havana.

The carrier intends to start its journey from Seattle to Los Angeles and then fly to Havana upon receiving approval from the Cuban government. Alaska Air Group is the only U.S. carrier to have received approval for daily non-stop flights between Havana and the U.S. West Coast. According to a media report, the carrier was originally scheduled to start flying to Havana from Nov 29, 2016. However, it requested for permission to delay due to the upcoming holiday season rush.

Notably, Alaska Air Group is not the only carrier to gain approval from the U.S. DOT to Havana. A total of eight U.S.-based carriers, including Delta Air Lines (DAL - Analyst Report) , American Airlines Group (AAL - Analyst Report) and United Continental Holdings (UAL - Analyst Report) , have been permitted to start flights to Cuba. The approval is a major positive as diplomatic ties with Cuba were severed more than 50 years ago. Even now, travel to Cuba is permitted only for purposes like family visits, education, journalism and humanitarian projects.

Visit to the nation for tourism is still prohibited, which would likely have been purpose of visit if the launch was during the holiday season. Alaska Air Group, while requesting for the delay, had apparently cited this clause and said that travel for the permitted purposes was more likely if its service was launched in early January, thereby increasing the chances of the new route being a success.

Apart from the Havana-related update, Alaska Air Group is in news due to its proposed acquisition of Virgin America (VA - Snapshot Report) . To allow the antitrust division of the United States Department of Justice (DOJ) more time to review the proposed buyout, the two companies have agreed not to close the deal before Oct 17 (unless the DOJ provides written concurrence to close earlier) as opposed to the earlier date of Sep 30.

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