America’s Greece: Puerto Rico’s economy is in tatters. But its airline sector is better off than you might think.

Economically speaking, it’s not a flattering comparison. But the island of Puerto Rico can’t escape the resemblance: It’s the Greece of North America.

Last year, Puerto Rico’s economy contracted yet again, leaving it about 5% smaller than it was at the start of the decade, adjusting for inflation. Since that time, the island’s population (about 3.5m today) has declined by more than 300,000 people, or roughly 8%. With its economy and tax base thus shrinking, there was little chance the U.S. territory could ever repay the $70b it owed, hence a Greek-like debt crisis that triggered intervention from Washington last year, and what was essentially a sovereign bankruptcy filing last week. The systemic risks to the broader U.S. economy are negligible, unlike the grave consequences Greece posed to the Eurozone. But for companies like airlines trying to cultivate local corporate and consumer demand, the situation in both places has been—and continues to be—downright dire.

Sure enough, Puerto Rico’s terrible economic circumstances mean less air service. In the first half of this year, seat capacity from the island is down about 1% y/y, according to Diio Mi, on 7% fewer flights (at a time when the equivalent figures for all of North America are— respectively—up 4% and up fractionally). And that’s before American, in the fourth quarter of this year, unceremoniously withdraws from the once-bustling San Juan-New York JFK route, which a decade ago it served five times daily each way with a mix of heavy-metal B767s, A300s and B757s. American actually operated a vibrant hub in San Juan, briefly anyway, after purchasing bankrupt TWA in 2001. Today, its presence on the island is a shadow of what it once was, flying there from its hubs in Miami, Dallas DFW, Chicago ORD, Philadelphia and Charlotte, not including the New York service it’s abandoning.

The news for Puerto Rico didn’t get any better when Norwegian recently decided to drop San Juan from its longhaul network after a brief try. That doesn’t bode well for the island’s chances of benefiting from the surge in low-cost transatlantic activity emerging from Europe. Last year, Iberia reentered San Juan after briefly suspending Madrid service. Spain’s Air Europa and Germany’s Condor fly to San Juan too. But Puerto Rico is otherwise absent from the thoughts of Europe’s airlines and…

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