U.S. Transportation Secretary Anthony Foxx and Cuban Transportation Minister Adel Yzquierdo Rodriguez signed the deal in a ceremony at Havana's Hotel Nacional.
U.S. airlines can now start bidding on routes for as many as 110 U.S.-Cuba flights a day - more than five times the current number. All flights operating between the two countries today are charters.
The agreement allows 20 regular daily U.S. flights to Havana, in addition to the current 10-15 charter flights a day. The rest would be to other Cuban cities.
"Today is a historic day in the relationship between Cuba and the U.S.," said Foxx. "It represents a critically important milestone in the U.S. effort to engage with Cuba."
Yzquierdo Rodriguez said "the adoption of this memorandum is an important step that will soon permit the establishment of regular flights between the United States and Cuba."
Barring other major announcements, the restart of commercial flights will be the most significant development in U.S.-Cuba trade since Presidents Barack Obama and Raul Castro announced in late 2014 that they would begin normalizing ties after a half-century of Cold War opposition.
The Obama administration is eager to make rapid progress on building trade and diplomatic ties with Cuba before the president leaves office. The coming weeks are seen as particularly crucial to building momentum ahead of a trip he hopes to make to Havana by the end of March.
Nearly 160,000 U.S. leisure travelers flew to Cuba last year, along with hundreds of thousands of Cuban-Americans visiting family, mostly on expensive, frequently chaotic charter flights out of Florida.
Commercial flights could bring hundreds of thousands more U.S. travelers a year and make the travel process far easier, with features such as online booking and 24-hour customer service that are largely absent in the charter industry.
U.S. visitors to Cuba will still have to qualify under one of the travel categories legally authorized by the U.S. government. Tourism is still barred by law, but the number of legal reasons to go to Cuba - from organizing professional meetings to distributing information to Cubans - has grown so large and loosely enforced that the distinction from tourism has blurred significantly.
Commercial travel will give travelers the ability to simply check an online box on a long list of authorized categories.
The deal does not contemplate flights by Cuba's national airline to the United States, where lawyers for families and businesses that have sued Havana over decades-old property confiscations are eager to freeze any of its assets that they can get their hands on.
Tuesday's announcement will open a 15-day window for U.S. airlines to request rights to the new Cuba routes. U.S. carriers would then have to strike deals with Cuban aviation officials, a process the U.S. hopes will be complete by the fall.
A number of U.S. carriers said they would bid on Cuba flights, in many cases without revealing the specific routes they will seek.
American Airlines spokesman Matt Miller said the company plans to bid on routes from Miami and other unspecified "American hubs."
The carrier has been operating U.S.-Cuba charter flights since April 1991, the longest of any U.S. airline, and currently offers 22 weekly flights out of Miami to Havana, Camaguey, Cienfuegos, Holguin and Santa Clara. American also flies from Tampa to Havana and Holguin, and between Los Angeles and Havana.
United Airlines is also looking to serve Havana from some of its hubs, spokesman Luke Punzenberger said. The carrier's major hubs include Chicago, Houston, Washington and Newark, New Jersey. It currently does not fly charters to Cuba.
JetBlue Airways said it was eager to offer service between "multiple" cities in the United States and the island, with spokesman Doug McGraw saying that "interest in Cuba has reached levels not seen for a generation." The carrier currently flies charters to various Cuban destinations out of New York, Tampa and Fort Lauderdale.
Discount carrier Spirit Airlines spokesman Paul Berry said it, too, plans to submit a proposal. Spirit's largest operation is out of Fort Lauderdale, accounting for 15 percent of its flights.
Southwest Airlines also expressed interest in flights to Cuba.
Delta Air Lines spokesman Anthony Black said the carrier plans to at least apply for flights from its Atlanta hub to Havana.
CBS MoneyWatch reported that other American travel companies are edging into Cuba. Cruise operator Carnival plans seven-night tours to the island starting this year.
(CBS News)
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