A Conviasa plane sits on the tarmac Simon Bolivar International Airport in Maiquetia, Venezuela. File picture: Carlos Becerra/Bloomberg
A Conviasa plane sits on the tarmac Simon Bolivar International Airport in Maiquetia, Venezuela. File picture: Carlos Becerra/Bloomberg

Covid-19 decimated aviation industry in 2020, yet Maduro's state-controlled airline had a great year

By Bloomberg Time of article published Mar 6, 2021

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Alex Vasquez, Nicolle Yapur

Last year may have been the worst in the history of the global aviation industry but for Nicolas Maduro's ragtag Venezuelan airline, business boomed.

Conviasa, as the state-run airline is known, says that its operations jumped 85% in 2020, making it one of the few carriers in the world to post any growth after the pandemic wiped out air travel.

The airline, which is banned from flying to the U.S. as part of that country's wide-ranging sanctions against the Maduro regime, 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 Moscow connection soon. Conviasa also now services high-demand routes to Panama and the Dominican Republic, which act as key transit hubs for Venezuelans.

While airlines in the U.S. and Europe have received billions of dollars in government bailouts to weather the coronavirus pandemic, Conviasa has gotten state support of a different kind. Competition has been quashed with permits delayed or last minute hurdles put up against carriers including Copa Holdings.

The secret to its relative success isn't hard to find. Keen on propping up state enterprises that can bring much needed hard currency revenue to a battered regime, President Maduro has allowed Conviasa to charge in dollars and at exorbitant rates for destinations such as Toluca, Mexico, or Viru Viru, Bolivia.

"If Conviasa has grown, that's great, but Venezuelan air operations shouldn't depend on a single airline, a single interest, that's dangerous, it's not right," said Reinaldo Pulido, vice president of tourism association Conseturismo. "You make a country of 30 million people dependent on a single company."

The airline, now run by Ramon Velasquez, a former soldier who also ran the Ministry of Eco-Socialism and Water, saw its operations nearly double last year, according to a company statement. In that period, passenger traffic fell 63% across Latin America and nearly 66% globally, the International Air Transport Association reported.

Purchasing a ticket, however, can be a maddening experience.

Conviasa's website is unreliable for bookings and even to check departure and arrival times. Nobody answers the service support numbers. Going to an office in person doesn't guarantee getting a ticket either, since they are usually sold out or agencies may not keep regular working hours.

Yet flights are usually full.

Conviasa doesn't publish financial reports or key data such as ticket sales, revenue, flight capacity or an operating budget. Neither Conviasa nor its main hub, Caracas's Maiquetia international airport, responded to requests for comments on the carrier's business practices.

When the first case of coronavirus was confirmed in Venezuela on March 13, 2020, the government quickly enacted one of the most severe lockdowns in the world and the airports were shuttered for seven months.

But when skies reopened in November, Conviasa received quick permits for newly approved direct flight destinations, such as Mexico, and announced an exclusive connection between Caracas and Bolivia. Other private airlines have struggled to get approvals.

Tickets to Mexico or Bolivia can cost up to $1 000, an amount vastly beyond the purchasing power of most Venezuelans.

The state-run airline was launched under Hugo Chavez in 2004 with a $16 million injection by state oil company PDVSA, as part of his government-sponsored socialist revolution. But under Maduro and an increasing web of international sanctions along with an ongoing seven-year economic collapse, the carrier was overrun by competitors.

US sanctions, however, have pushed Maduro into accepting the dollar for everyday transactions and he's opening certain industries to public-private partnerships as part of a survival plan that critics liken to crony capitalism.

Once a symbol of an ambitious, well-funded government effort seeking to demonstrate its power and connect Venezuelans with the world, Conviasa has become an escape valve for the elite close to the president, flying mainly to the few countries where they can enjoy a trip away from the shadow of sanctions.

Recent spats with Copa and, in 2017, with Avianca Holdings have also mirrored rifts Maduro had with the governments of Panama and Colombia. Copa, one of the few airlines connecting Venezuela to the rest of the world via Panama, has seen its flights restricted to just eight a week from 35 before the pandemic.

Since early December, the government has often changed its mind on whether to reopen its airspace, leaving thousands of passengers stranded from one day to the next.

Conviasa's fleet includes 20 Embraer E190 airplanes, for 104 passengers each, as well as two Airbus A340 planes, fitting about 300 passengers each. At its peak, the company operated some 50 aircraft and has plans to boost that number to about 80, according to its president.

Prior to the pandemic, Copa and other local airlines operated the bulk of flights. TAP, Iberia and Air Europa continue to fly to Europe, although operations are halted due to the pandemic. Turkish Airlines has a Caracas-Istanbul route.

Venezuela, strategically located just three hours from Miami and about six hours by plane from Sao Paulo, boasted more than 350 international flights a week back in 2010. That figure now stands at a few dozen. Just nine international airlines operate at all. Delta Air Lines Inc. and United Airlines Holdings Inc. haven't flown to Venezuela since 2017. American Airlines Group Inc. suspended service in 2019.

Rodolfo Ruiz, aviation lawyer at international law firm Clyde & Co., said that several airlines are lobbying the Biden administration to reopen the lucrative Caracas-Miami route.

"There are still people who need to travel and can afford it," Ruiz said. "Even if it's a minority."

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