Outside In

By Johannes Werner Photography by Williams S. Speer February 28, 2010

Bring In the Europeans

Remember what happened to Fort Myers in 1993? A low-cost transatlantic airline picked Southwest Florida International Airport as a destination, and things have never been the same. Thousands of European tourists have landed here, many of them buying homes, filling hotel rooms and using our services. 

Sarasota-Bradenton now has the same opportunity, and this should be exciting news for everyone.

At a Tourism Development Board meeting in early January, Sarasota Bradenton International Airport CEO Rick Piccolo announced the airport was “very, very close” to landing twice-weekly Sarasota-Frankfurt flights with a German tour operator. For this to happen, the airport and the airline deserve our support, encouragement and attention.

If my industry sources are correct, three airlines are the most likely candidates for a Sarasota-Frankfurt route.

The most likely is Condor Flugdienst GmbH. The German airline, which once served Miami, Tampa, Fort Myers and Orlando, is staging a comeback in Florida. In May, Condor will start offering Fort Lauderdale-Frankfurt flights; adding a Gulf Coast destination would make strategic sense. The airport is in discussions with Condor and is hoping for a decision this spring. In January, a Condor spokesman would only say this was nothing more than “a rumor.”

The other likely candidates are TUIFly, the German airline division of tourism giant TUI, and Air Berlin. TUIFly currently doesn’t offer any U.S. destinations, but it has a cooperation agreement with Air Berlin, which already flies the Fort Myers-Düsseldorf and Miami-Düsseldorf routes. Air Berlin is the third and least likely candidate, because it already serves nearby Fort Myers.

But no matter what airline and under what conditions—this could be the game changer our economy needs to get out of the hole.

A nonstop connection to the heart of Europe will, according to Piccolo, bring up to 30,000 high-spending bodies every year into the region, with eventual needs for roofs and services. If that’s what your business is about, fine. But for the sake of diversifying our lopsided economy, the connection means much more than just tourism and real estate opportunities. Sarasota-Bradenton will suddenly appear on the map of thousands of businesses in Germany, the Netherlands, Belgium, Switzerland, Austria, the Czech Republic, Slovakia, Poland and beyond.

Among the tens of thousands of potential visitors from Central Europe, there will also be thousands of business owners and corporate executives who may discover that they could well do business from Southwest Florida. That’s really the economic development potential that gets me excited.

Step back and think about how this could serve your business. Think in terms of what you could sell there. Think in terms of air cargo. Think in terms of what your business might have to offer to partners in Europe.

If the airport gets a deal, you’ll have a little more than one year to think, since service is expected to start in 2011.

And before that, let’s make sure it will happen—and if it’s not with this particular airline the airport is negotiating with, maybe with another one. The airport and, more importantly, the airlines, need to hear from you. In fact, the Sarasota and Manatee chambers of commerce should set up a task force to channel our support and needs to the airlines.

Let’s not kid ourselves: Whether SRQ will actually get the connection is far from assured. And once an airline commits to a destination, it will check again after each season to see if it’s worthwhile. It’s exciting that our little airport has actually gotten this far. If you want this project to succeed, you and your business must get involved.

U.S.-Cuba oil?

What with full pat-downs for Cuba travelers at U.S. airports, continued Bush-era regime-change programs, and Havana arresting a USAID subcontractor, it’s Ice Age 3 in U.S.-Cuba relations.

But a very powerful player is beginning to increase the heat on the embargo on Capitol Hill: Big Oil. Very quietly, U.S. Sens. Mary Landrieu (D-La.) and Lisa Murkowski (R-Ak.) inserted oil exemption wording into a Senate bill last summer, and now an oil industry association has gone on the record saying it prompted the move.

Congressional bill 1517, which mainly deals with increased federal oil revenue sharing for Gulf of Mexico states, includes a section towards the end that would allow U.S. citizens and residents to “engage in any transaction necessary” for oil and gas exploration and extraction in Cuba, “notwithstanding any other provision of law.” For that purpose, the bill would amend the Trade Sanctions Reform and Export Enhancement Act of 2000, allowing oil industry employees to travel to Cuba without having to apply for a specific license with the U.S. Department of Treasury.

The bill is pending before the Senate Committee on Energy and Natural Resources; with senators such as Bob Menendez (D-N.J.) and George LeMieux (R-Fl.) determined to defend the embargo tooth and claw, the bill is facing a tough fight. Even so, S1517 is remarkable because it embodies the first Cuba-related move on Capitol Hill by the U.S. oil industry.

Platts Oilgram News, an industry newsletter, reported it was the Petroleum Equipment Suppliers Association

(PESA) that encouraged Landrieu to insert the two Cuba sections. A vice president of Halliburton, who heads PESA’s government affairs, told Platts the trade organization is “very interested” to “address current Cuba policy.”

These are remarkable words. The industry has come out of the Cuba closet.

More Cuban business opportunities

Yes, cash crunch is the topic du jour in Cuba. But at the same time, new business opportunities are opening up for astute and long-term-minded players. Thanks to the ALBA trade and integration agreement, the island is becoming a jumping board to other markets, and a handful of Asian and European companies are taking the plunge.

Cuban-Venezuelan teams have installed more than 300 generators made by Germany’s MTU Onsite Energy in Venezuela recently, for instance. Even more interesting is the case of Spanish generator manufacturer Guascor SA, which set up a joint venture in Cuba last year, and now services and maintains its generators that have been installed by Cuban engineers in other countries.

What Guascor and MTU are piggybacking on is this: Cuba is exporting its energy revolution, and with it hundreds of millions of dollars worth of equipment. In an effort to help Venezuela get rid of rolling blackouts, the island has recently supplied the South American country with 43 small diesel power plants, each consisting of multiple generators, and Cuba is in the process of providing approximately 30 more over the next two months.

This latest Cuban revolution emerged when Fidel Castro, during his last couple of years in office, had to do something about the increasing blackouts and systemic breakdown of an aging electrical system. His energy minister and engineers told Fidel that Cuba had to spend its way out of the crisis with billions of dollars for new thermoelectric power plants, a process that would have taken years, if not decades. Instead, Fidel replaced his longtime energy minister and dismissed the engineers. He ordered a systematic and massive campaign to save energy and, taking a page from green tech pioneers in Europe, he decentralized Cuba’s electricity production. Spending upwards of $500 million, Cuba installed thousands of small diesel and fuel-oil generators throughout the island. Within a matter of a few months, the blackouts disappeared.

Cuba is now propagating its distributed power generation concept as a model for fellow ALBA member countries and other developing nations. Beyond Venezuela, Cuba already provided seven mini power plants to Nicaragua and one 60-mw power plant to Haiti. Cuban electric engineering teams are also working in Ecuador and Equatorial Guinea in Africa.

Probably, competitors Hyundai and MAN B&W will become more proactive as the Cuban model gets replicated by more developing nations. But one name will be missing from that business opportunity: Caterpillar Corp., the biggest U.S. generator manufacturer.

Cuban-American relations and Haiti

Crisis also means opportunity: The earthquake in Haiti is helping to thaw some ice between the United States and Cuba.

As a starter, on the night of the earthquake, Fidel wrote in a column that Cuba was willing to “cooperate with any other state.” Cuba, which has some 400 doctors deployed in Haiti, is allowing U.S. relief planes to fly over its territory.

And here is how State Department spokesman Charles Luoma-Overstreet answered the question of an Italian correspondent whether it is “possible to imagine” U.S.-Cuban cooperation over Haiti:

“Absolutely. This is an effort that goes beyond politics. We’re interested in addressing the dire humanitarian needs on the spot right now. I can’t speak to precisely the level of resources that the Cuban government is bringing into Haiti, but to the extent they are there, we are certainly going to talk and collaborate and work to see that people are helped there. I know the Cubans have given us specifically authorization already to be using Guantanamo as a staging point coming into Haiti. That’s a sign of the close cooperation we’re doing to put politics aside and address the humanitarian needs here.”

Meanwhile, a Reagan Administration assistant defense secretary is dreaming of the ideal disaster response combination: U.S. helicopters and Cuban doctors.

“We should stop and think that Cuba right next door has some of the best doctors in the world,” says Lawrence Korb, now an analyst at the Center for American Progress in Washington. “We should see about flying them in.”

Johannes Werner is a Sarasota-based, award-winning business journalist who covers Latin America and global issues for a variety of publications. He writes the column “Outside In” for Biz941 and is also the editor of Cuba Trade & Investment News and the Venezuela Trade & Investment News.

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