Exclusive: U.S. airfares to Puerto Rico slide; debt crisis, Zika weigh

Wed Feb 24, 2016 6:16am EST
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By Jeffrey Dastin and Nick Brown

NEW YORK/SAN JUAN (Reuters) - U.S. airlines have slashed leisure fares to Puerto Rico in recent months to lure travelers to the debt-strapped island, hit by economic turmoil and lately the arrival of the mosquito-borne Zika virus.

The lowest fares to San Juan, Puerto Rico, have fallen 22 percent on average from a year ago, according to an early February analysis of six of the busiest U.S. domestic routes to the island's capital by Harrell Associates, shared exclusively with Reuters.

The drop outpaced an 18 percent fall nationwide in the high-restriction fares during that time, according to the travel consultancy's analysis.

"It's a combination of slack demand in both directions," said Robert Mann, an airline industry consultant.

"Leisure travelers going to Puerto Rico are concerned both about the state of the economy and the extent to which leisure resort facilities are going to be properly maintained," he said. "If you're a Puerto Rican resident, the buying power just isn't there."

With a stagnating economy and an exodus of its population to the mainland, the U.S. territory has defaulted on part of its $70 billion in debt and asked its creditors to renegotiate the borrowing terms to slash its debt burden.

Puerto Rico is also one of 28 countries and territories in the Americas battling the Zika virus. It reported 63 cases as of Feb. 18, and U.S. health officials expect many thousands of residents to contract the virus once the mosquito season peaks this summer.

"Mosquito-borne viruses are a severe and immediate threat to the health and safety of my constituents," the territory's representative to Congress, Pedro Pierluisi, said in a statement on Tuesday, urging the U.S. government to help reduce threatening mosquitoes on the island.   Continued...

A view of the Luis Munoz Marin international airport in San Juan May 10, 2012.  REUTERS/Ana Martinez