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AGP: Southwest to pump $200M into Puerto Rico economy

Gov. García-Padilla stands on the runway as Southwest's first flight to Puerto Rico taxis in Sunday morning. (Credit: La Fortaleza/Alex Rafael Román)

Gov. García-Padilla stands on the runway as Southwest’s first flight to Puerto Rico taxis into the terminal Sunday morning. (Credit: La Fortaleza/Alex Rafael Román)

Puerto Rico’s economy stands to make $200 million a year through the arrival of Southwest Airlines, which landed on the island for the first time Sunday morning, carrying more than 170 passengers from Orlando.

Flanked by his heads of Tourism and Ports, Gov. Alejandro García-Padilla said the airline’s arrival, coupled with increased cruise ship activity on the horizon over the next two years, will help boost the tourism sector’s contribution to Puerto Rico’s Gross Domestic Product.

“Our tourism sector has lost its momentum during the past decade. Today, tourism represents only about 7 percent of our GDP. With the arrival of renowned airlines such as Southwest, we take an important step so that the local tourism industry reflects the global reality — this important economic sector contributes nearly 10 percent of global economic activity,” said the governor during a morning news conference at the Luis Muñoz Marín International Airport in Carolina after he welcomed the discount carrier’s inaugural flight.

This airline, he said, will expand travel options and will reduce travel costs for Puerto Rico residents and visitors alike. Southwest launched its first routes outside the continental U.S. Sunday, with connections between San Juan and Orlando three times a day and once daily between San Juan and Tampa Bay.

Eventually the airline, which is systematically merging its operations with AirTran — which it purchased in May 2011 — will offer more routes to Florida and other markets that express demand, said Teresa Laraba, senior vice president customers for Southwest.

“As we start to see demand rise and start to see this is a profitable market for us, we’ll add more services,” she said. “Our goal is to get into the community, bring in the traffic and tourism to San Juan and fill up those flights. Our strategy is to go into markets that are overpriced and underserved.”

For now, both carriers will continue offering services out of LMM, with AirTran flying between San Juan and Baltimore/Washington, Fort Lauderdale/Hollywood, and Atlanta.

Tourism Co. Executive Director Ingrid Rivera, García-Padilla and Ports Authority Executive Director Víctor Suárez offer details of new tourism activity by air and by sea.

Tourism Co. Executive Director Ingrid Rivera, García-Padilla and Ports Authority Executive Director Víctor Suárez offer details of new tourism activity by air and by sea.

Cruise ship activity picking up
During the news conference, García-Padilla denied published reports about Carnival Cruise Lines’ impending withdrawal from the Puerto Rico market, saying the company has already confirmed its schedules for 2014 and 2015, which include San Juan in its routes.

Furthermore, he said Princess Cruises, Disney Cruise Line, and Royal Caribbean’s Jewel of the Seas plan to drop anchor at the San Juan pier this summer.

“In preparation for that increase in traffic, we’re investing $4 million in improvements to the piers, and will invest more in July,” García-Padilla said.

Meanwhile, he also said his administration is working on extending the Puerto Rico Law for the Promotion and Development of the Cruise Ship Industry — signed in 2011 — through 2018 and is also in talks with cruise ship executives to establish different per-passenger fee during low seasons.

“Part of the process of extending the law is to study it and get involved with the industry, so that we can be competitive,” said Ingrid Rivera-Rocafort, executive director of the Puerot Rico Tourism Company. “We’re working so that Puerto Rico remains an important and attractive destination.”

García-Padilla said he met with cruise ship executives while on the campaign trail last year, getting feedback from them to improve conditions. He said companies brought up three issues: the counter-effect of high port fees, comparing Puerto Rico’s $13-per-head rate, vs. St. Martin’s $3-per-head rate; the deterioration of the ports area; and a lack of security in Old San Juan.

“We’re working on all three issues,” García-Padilla said. “We’re already reverting the trend of cruise ships leaving and increasing the number of vessels that use Puerto Rico as home port.”

“In the manner in which we can get more ships to call on Puerto Rico as a homeport, the more demand we’ll create for airlines and hotels,” he said. “Cruise ship passengers usually arrive at their destination a day or two ahead of sailing and leave a day or two after wrapping up their trip. That’s what we’re after.”

Author Details
Author Details
Business reporter with 30 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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