How the Maduro regime choked international airlines to secure millionaire profits for state-owned Conviasa

Last year may have been the worst in the history of the global aviation industry, but for the rocky Venezuelan airline of Nicolás Maduro, business exploded. Conviasa, as the state-owned airline is known, claims its operations have skyrocketed 85% in 2020, making it one of the few airlines in the world to experience growth after the pandemic wiped out air travel.

The airline, which is prohibited from flying to the United States as part of that country’s general sanctions against Maduro’s regime, it now has regular flights to five countries. Three of them are led by Maduro’s political allies – Bolivia, Iran and Mexico – and there are plans to add a connection with Moscow soon.. Conviasa now also offers high-demand routes to Panama and the Dominican Republic, which act as transit hubs for Venezuelans.

As US and European airlines have received billions of dollars in government bailouts to deal with the coronavirus pandemic, Conviasa has received state support of a different kind. Competition has been crushed with delayed permits or last minute hurdles imposed on airlines, including Copa Holdings.

The secret to its relative success is not hard to find. President Maduro, determined to support state-owned enterprises that can provide much-needed foreign exchange income for a battered regime, has allowed Conviasa to raise dollars at exorbitant prices in destinations such as Toluca, Mexico, or Viru Viru , in Bolivia.

“If Conviasa has grown up, that’s fine, but Venezuelan air operations shouldn’t depend on one airline, one interest, it’s dangerous, it’s not good,” Reinaldo said. Pulido, vice-president of the Conseturismo tourist association. “You make a country of 30 million people depend on one company.”

The airline now led by Ramón Velásquez, a former military man who also headed the Ministry of Ecosocialism and Water, saw his operations nearly double last year, according to a company statement. During this period, passenger traffic fell 63 percent across Latin America and nearly 66 percent globally, the International Air Transport Association reported.

However, buying a ticket can be an overwhelming experience.

The Conviasa site is unreliable for reservations and even for checking arrival and departure times. No one answers customer service numbers. Going to an office in person also does not guarantee you get a ticket, as they are usually full or agencies may not have regular working hours … However, flights are usually full.

Conviasa does not publish financial reports or key data such as ticket sales, revenue, flight capacity or an operating budget.. Neither Conviasa nor its main hub, Maiquetía Caracas International Airport, responded to requests for comment on the company’s business practices.

When the first case of the coronavirus was confirmed in Venezuela on March 13, 2020, the government quickly declared one of the toughest closures in the world and airports were closed for seven months.

But when the skies reopened in November, Conviasa quickly received clearances for new approved direct flight destinations, like Mexico, and announced an exclusive connection between Caracas and Bolivia. Other private airlines have had difficulty obtaining clearances.

Tickets to Mexico or Bolivia can cost as much as $ 1,000, an amount well above the purchasing power of most Venezuelans.

State Airline It was launched under Hugo Chávez’s tenure in 2004 with an injection of $ 16 million by the state-owned oil company PDVSA, as part of the socialist revolution sponsored by his government. But under Maduro and a growing web of international sanctions coupled with a seven-year economic crisis, the airline has been outmatched by its competitors.

U.S. sanctions, however, have pushed Maduro to accept the dollar for day-to-day transactions and are opening up some industries to public-private partnerships as part of a survival plan critics equate to crony capitalism.

Conviasa, which was once the symbol of an ambitious and well-funded government effort that sought to demonstrate its power and connect Venezuelans to the world, has become an escape valve for the elite close to the president, who mainly flies in the a few countries where you can enjoy a trip away from the shadow of sanctions.

The recent feuds with Copa and, in 2017, with Avianca Holdings also reflected the disagreements Maduro had with the governments of Panama and Colombia. Copa, one of the few airlines to connect Venezuela to the rest of the world via Panama, has seen its flights limited to just eight per week, up from 35 before the pandemic.

Since early December, the regime has often changed its mind about reopening its airspace, leaving thousands of passengers stranded overnight.

Conviasa’s fleet includes 20 Embraer E190 aircraft, each for 104 passengers, as well as two Airbus A340s, with a capacity of around 300 passengers each. At its peak, the company operated around 50 devices and plans to increase that number to around 80, according to its chairman.

Before the pandemic, Copa and other local airlines operated most flights. TAP, Iberia and Air Europa continue to fly to Europe, although operations are halted due to the pandemic. Turkish Airlines operates a Caracas-Istanbul service.

Venezuela, strategically located just three hours from Miami and about six hours by plane from Sao Paulo, had more than 350 international flights per week in 2010. Today, that number drops to a few dozen. Only nine international airlines operate. Delta Air Lines Inc. and United Airlines Holdings Inc. have not flown to Venezuela since 2017. American Airlines Group Inc. suspended service in 2019.

Rodolfo Ruiz, an aviation lawyer at international law firm Clyde & Co, said several airlines were pressuring the Biden government to reopen the lucrative Caracas-Miami route. “There are still people who need to travel and can afford it,” Ruiz said. “Even though it’s a minority.”

With information from Bloomberg

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