American Airlines is Being Sued for “Trafficking” the Havana Airport

The Wall Street Journal opinion pages highlighted the lawsuit that American Airlines is facing under the 1996 Helms-Burton law filed by a man who says his family owned the Havana airport before it was taken during the Cuban Revolution.

The 1996 Helms-Burton Act allows Americans to sue companies profiting from land expropriated in Cuba. The law contains a provision allowing U.S. Presidents to suspend implementation of this private right of action for six month periods at a time, which every administration has done up until now. However the Trump administration is now allowing Helms-Burton claims to proceed, and in May Carnival Cruise Lines became the first U.S. company to face a suit under the law.

Sign in support of the Cuban revolution

The Family That Once Owned the Havana Airport Wants American to Pay Them Back

The plaintiff says his father owned the Havana airport when it was taken by the Cuban government during the 1959 revolution. He purchased what was then Rancho Boyeros Airport seven years earlier from Pan Am and made investments to “modernize[.] and improve[.] it by extending the runway and building a new terminal building.”

While the plaintiff hasn’t specified the damages he’s looking for in his suit, he claims that his stake in the airport was worth “$24 million at the time of confiscation” so would presumably be seeking that amount plus 60 years’ of interest or a determined current market value – and by providing statutory prior notice of the suit he’d also likely be seeking treble damages.

That could get him up into the range of $750 million in claims over the airport. He is also pursuing a suit against American’s oneworld partner LATAM.

The Capitolio in downtown Havana

U.S. Law Lets People Whose Property Was Taken By Cuba Sue Corporations for Repayment

Title III of the Act explains that it is in response to “[t]he Cuban Government..offering foreign investors the opportunity to purchase an equity interest in, manage, or enter into joint ventures using property and assets some of which were confiscated from United States nationals.”

This is referred to as “trafficking” in confiscated property, and the Act seeks to stop the flow of funds to the Cuban government which “undermines the foreign policy of the United States.”

The goal is to avoid “the transfer to third parties of properties confiscated by the Cuban Government” which “would complicate any attempt to return them to their original owners.”

The law seeks to stop “unjust enrichment from the use of wrongfully confiscated property by governments and private entities at the expense of the rightful owners of the property.”

Fishing on the Malecón in Havana

The Lawsuit Against American Should Not Succeed

Since there haven’t been any private lawsuits under the act permitted in the 23 years since it was passed, until this year, there’s not case law directly on point to rely upon. I’ll offer what I think are relevant points while expressly noting that this is not a legal analysis of the case.

  • American Airlines has not taken an equity interest in the airport, does not manage the airport, and does not have a joint venture there.

  • They do not appear to be “trafficking” in the property of the airport, merely using it.

  • Rather than undermining the foreign policy of the United States, their flights have been specifically authorized by the United States and can therefore be presumed to be consistent with its policy.

  • American’s use in no way complicates future return of the airport to its rightful owners. In fact the funds paid for use of the airport support airport upkeep – indeed, preservation of the value of the asset in the event it’s ever returned.

  • American isn’t receiving unjust enrichment from their Cuba flights. They’re likely losing money.

And in fact American probably isn’t even making money off of the airport since Havana has some of the highest airport costs in the world. They’re paying for the value they’re receiving, and likely overpaying.

And they’re also probably not making money off of travel to Cuba, either. American Airlines loses money much (but not all) of the time flying, making money largely from selling frequent flyer miles to Citibank and Barclays.

Despite Miami – Havana probably being the best US-Cuba route, American likely loses money on its Cuba flying in particular. This is especially likely given the Trump administration’s crackdown on travel to Cuba.

Even before the crackdown specific routes were getting dropped to Cuba and entire airlines were pulling out.

Airlines went into Cuba to squat on limited slots on the expectation that it would be a future gold mine. New routes always start slow, this one has been hindered by the U.S. government, and the nature of the market makes it challenging to begin with given that nearly all of the demand is on the U.S. side (very few Cubans can afford to travel even if they can afford passports), it’s almost all leisure travel, and operating costs are high.

While I can’t speak to the circumstances around which this man’s family may have acquired an ownership interest in the Havana airport, I’m generally in favor of restoring ownership of things to those from whom they’re taken (like when the U.S. government takes cash from Americans while they’re traveling without ever charging them with a crime), this claim doesn’t seem warranted.

Mary Anastasia O’Grady writes in The Journal, “there is a difference between being cleared by Treasury to conduct business in Cuba and using expropriated assets to sustain those businesses.” However ‘using’ expropriated assets isn’t what creates a claim under Helms-Burton, as I’ve explained by actually reading the text of the statute. So her claim that this difference she identifies is dispositive (“[i]n a U.S. court of law that may turn out to be no small distinction”) I believe she’s simply misunderstanding the law.

American isn’t taking ownership of the assets and likely isn’t making money off of them. The flights aren’t against U.S. policy, they’re sanctioned by policy. And while I’m sympathetic to Cuban refugees, American Airlines is reuniting families by making travel between South Florida and Cuba possible rather than harming the Cuban community. Regular readers know I’m often critical of American Airlines. This time they’re 100% in the right.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. How much money and resources will be wasted/tied up in the legal system? …for the sole purpose of Trump pandering to the Cuban-Americans in Florida.

  2. Good article Gary with the exception of your statement that “regular readers know I’m often critical of American Airlines” What?! Give me a break!

  3. How much money and resources will be wasted/tied up in the legal system? Not nearly as much as the party of the jackass has been wasting playing resistance games in the House of Representatives.

  4. I think Trump allowing people to sue companies that profit from property that was stolen from them – Is long overdue. I’m not sure how anybody can be against this. How about the government steals your house and gives it to Microsoft or Apple? I imagine you would like some compensation for this….

    With that said: I agree with Gary. This isn’t something I would think qualifies….

  5. @Mangar, I suppose you are also in favor of other countries deciding what they think is wrong or right about US law and imposing it on every other country in the world as well? As noted, LATAM is also being sued. LATAM is a South American company being sued in regard to a matter that involves Cuba and they are being sued in American courts by an American. The US has no right to allow lawsuits in their courts against foreign company’s actions in foreign countries.

  6. This is pointless. Some countries for example Canada have laws that prevent companies from being liable under this act. Not to mention the law has specific exceptions for US companies that are going to Cuba legally. I’m sure American airlines are going to Cuba legally so this just seems like a money grab. In the carnival case the guy who is suing is a frickin neurosurgeon. Hardly someone struggling to get by and the docks in question were owned by his grandfather. None of the people suing are people who contributed to these properties at all. They are just descendants of the owners and they are looking to get paid when they didn’t do anything to add value or contribute to said properties.

  7. Gary said: “The 1996….law contains a provision allowing U.S. Presidents to suspend implementation of this private right of action for six month periods at a time”.

    Sounds really loopy to me.

  8. So Gary is now the jury: “American isn’t receiving unjust enrichment from their Cuba flights. They’re likely losing money.

    This is a politically motivated post. If American is losing money, they can prove it to the court and the court can pas son costs to the losing side. That’s justice.

    This fact-less article is propaganda.

  9. @AlohaDaveKennedy, Bengazi, Bengazi, Bengazi, Tarifs, Bengazi, Bengazi, Bengazi, interest on/ national debt, Bengazi……

  10. Just another of the ridiculous things that have happened under the Trump reign. Next they will try suing anyone who used the Havana airport. Or was that just trespassing?
    Also, why should the US government be telling its’ citizens that they can’t travel to countries that citizens of other “free” countries are allowed to travel to?

  11. Just another of the ridiculous things that have happened under the Trump reign.

    Yeah a law got passed in ’96 and all the presidents have been abusing a loophole to stop it from going into effect until now.

    Like the time Bubba GWB and 0 all said “We must recognize Jerusalem is Israel’s capital”, passed a law to that effect and then did the same 6 month kick the can for 20 something years.

    At least The Donald is doing stuff.

  12. @Jimmy. No worries. Now that Biden is history, Pocahontas has a free run at the Presidency. She will look out for her people (ie American Indians).

  13. I too cannot fathom how some folks view these sorts of suits in a negative light. Whether you were a Jew in Eastern Europe in the 40’s, a Cuban on the island in the late 50’s, or otherwise-theft is theft. It is interesting to see EU states trafficking in these properties state their intentions to bring a suit before the WTO or enact blocking statutes-all the while never addressing the fact that they are making money off of stolen property, on the backs of the Cuban people. Quite frankly, it’s appalling. I’m no fan of Donald Trump. Truth is I see him as an imbecile, yet enacting title three was the correct action from a moral standpoint.

  14. Gary, you’re right in your reply to Jimmy that Helms-Burton does not give reparative rights to Native Americans. But you did state “I’m generally in favor of restoring ownership of things to those from whom they’re taken.” Not putting you in this group, but anyone who supports restoring confiscated property in Cuba but not in the USA is just motivated by narrow anti-communist (or pro-GOP) sentiment and no larger moral philosophy.

  15. Interesting. Many cheer this law but the mere mention of reparations for Black folk for slavery, extra-judicial killings, terrorism, state-sponsored discrimination and many of the same people become apoplectic. The world we live in.

  16. @Jimmy native Americans had no concept of property, and so they had none to steal. In any case, borders of just about every country in the world were set by violent conflict. No different here. Now go find another special group with their hand out to rally around.

  17. @WR2…. you mean like Cuban-Americans getting political handouts from the GOP to keep them voting Republican?

  18. @KidStarA: I think it was the Bay of Pigs disaster that convinced CubanAmericsns to lean Republican.
    Back to the topic: legally, the airport was acquired in an eminent domain action, and the net proceeds of the sale were taxed 100%, like a combination estate tax and income tax. Or like a property tax sale confiscation, whereby property taxes are gradually increased to the point that the owners cannot keep up the maintenance or improvements and pay the taxes and mortgage and insurance, so the property taxes go into arrears, then into auction, and 5 years later, a new owner emerges, free and clear.
    This one may not have involved the “I am your banker, and I am here to help you…” situation. (Bankers are not bad… but banks cannot subsidize bad business models and their contracts must protect the bank, or else savers and investors would never trust a bank, nor anyone, with their money.) Or the scam of: let’s all run up costs, pat ourselves on the back with golden parachutes, jump out, and let new mgmt declare bankruptcy to shed all of our pension obligations, creditor obligations, etc., that airlines, railroads, the list escapes me…
    How about the scam of: you defrauded the Federal govt of more than 100K of income taxes, so you have to: pay it back; go to prison; and lose your license to practice _____ (fill in the blank). Go bankrupt. Lose your assets. Pay atty fees. Unless you settle with the IRS, whereby, depending on which settlement offer you get, you may pay a random amount between 10% and 90% of the total amount owed. I believe the phrase is arbitrary and capricious.
    Too complicated for you? Lets go with the simple explanation: the owner abandoned the property when he left the country.
    In any event, laws must be practical to follow and enforce. I know: that point in time is long gone, but the butterfly legal arguments: you are liable because you recommended a restaurant that had a pattern of serving bad food, and my client got food poisoning due to your 5 star Yelp review… will be the downfall of any legal system where laws defy common sense.
    Apologies for rambling.

  19. Not only should the “plaintiff” lose this case, but he/she should be forced to pay for all legal costs incurred by American Airlines during the course of this frivolous lawsuit. I hate stuff like this, I really do and I hope that this jerk loses his or her shirt.

  20. @other, YOU ARE A BULLY Just like Trump is. Do you call your mother names too? You call Jews names? Blacks Names? Gays Names? How about your kids you talk to them like that?

    You perpetuate HATE.

    @gary this is a travel forum not a Bully pulpit for name calling .

  21. @Dillion York: You do realize my comment was in September 2019. Not sure why Gary re-posted this. But on to your out of control rant. Have you had a stroke recently? Or maybe it is drug related? Or it just might bi-polar type of thing? In any case, brain damage is so sad. I feel for you.

  22. Stogieguy7: how is this a frivolous lawsuit? Is your position that the plaintiff did not own the airport? I would imagine it’s well documented.

  23. @WR2, “native Americans had no concept of property, and so they had none to steal.” That’s false of course, but still…Wow! That’s definitely the logic of the oppressor.

    Native Americans knew what property was and who owned or had rights to use it. Treaties with the U.S. (broken repeatedly by Americans) also established property rights and sovereignty.

  24. In 2015 my wife and I had a fine trip to Cuba. Without going into endless debate, the Revolution was a mixed bag of pros and cons, but one thing is clear. So long as the U.S. keeps an embargo in place the government in Havana will have an excuse for why things aren’t improving. There were billboards all over the place stating this. For gosh sake’s the U.S. has normal relations with Vietnam and “Red China”, as well as dozens of other dictatorships. What’s the point of a Cold War holdover except to get votes from one group, most of whom were born a generation or two after their families left the island? It has reached the point where the U.S. abuses Cuba just because it has become a habit.

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