(Adds details and background, byline; changes dateline to HAVANA, previous WASHINGTON)
By Daniel Trotta
HAVANA, Feb 16 (Reuters) - American and Cuban officials signed an arrangement on Tuesday to restore scheduled air service between the two countries after half a century, setting off competition among U.S. airlines for the best routes to the Caribbean island.
The signing ceremony in Havana formalized what officials had announced in December: that the two former Cold War rivals would add scheduled commercial airline service to the current charter flights.
"Today is a historic day ... signaling that for the first time in more than five decades the United States and Cuba will allow scheduled service between our two nations," U.S. Transportation Secretary Anthony Foxx said at the ceremony.
American travel to Cuba, both authorized and surreptitious, has boomed since U.S. President Barack Obama and Cuban President Raul Castro agreed to start normalizing relations in December 2014.
Shortly after the signing, JetBlue Airways, American Airlines and United Airlines each issued statements expressing interest, with the most competition expected for the 20 round-trip flights between U.S. cities and Havana, the Cuban capital.
The deal, which officials called a memorandum of understanding, also permits up to 10 daily round-trips to each of nine other international airports in Cuba.
U.S. airlines have until March 2 to submit route applications to the U.S. Transportation Department, which will spend about a month collecting information and likely decide in the summer who can fly from which U.S. cities to Havana.
The department has said it will attempt to "maximize public benefit" in assigning the flights.
Washington and Havana restored diplomatic ties in July after a 54-year break, but commerce remains limited by the U.S. trade embargo, which includes a ban on American tourism to the Communist-led island.
The Republican majority in Congress has defied Obama's call to rescind the embargo, so he has used his executive authority to relax some trade and travel restrictions.
U.S. officials said authorized travel has risen 54 percent since rapprochement, but Cuban data show U.S. arrivals increased by 77 percent to 161,000 in 2015, a disparity explained by Americans breaking the tourism ban and flying to Cuba through third countries.
Legally, American travelers still have to fit one of the 12 categories of authorized travel, such as for educational or religious activities, but violators appear to face little risk of being prosecuted. The Treasury Department's Office of Foreign Assets Control has not fined any Americans for visiting Cuba since Obama took office in January 2009, its database shows. (Reporting by Daniel Trotta, Jeffrey Dastin and Megan Cassella; Editing by Jonathan Oatis)