Idiocy And Airlines In Venezuela

November 4, 2014


What is it about airlines that brings out the most idiotic logic out of Venezuelans? I have found the subject the most difficult to talk about even with people that understand markets and are fairly logical and intelligent. In the eyes of many, it was the airlines that became the bad guys in the escalation of ticket prices, later in abandoning Venezuela, as if Government policy (idiotic before and after Chavismo) had nothing to do with it. How many times did I hear the argument that a flight to Aruba costs half as much as a flight to Caracas? Duh!!! The Aruban (or Colombian) Government barely regulates how many flights can land in their airports, they don’t ask for reciprocity or try to regulate fares. You want to come to Aruba or Colombia, you have a good reputation? Come on down!

By the time airlines began leaving Venezuela, reducing flights and dollarizing airfares, at least some (not all!) people understood that airlines were not making a mint in Venezuela like they thought, since they could not repatriate their Bolivars. It was Monopoly money.

But somehow, the idiocy over airline policy continues. This week, the institute in charge of air travel, the INAC, started by stopping airlines like Aserca, which flies within Venezuela and nearby destinations, from selling new tickets until they would improve their online performance. (It also stopped Government woned airline Conviasa) Now, the first question I would ask the guy from INAC is: Where were you and your 2,000 “agents” for the last sixteen years?  Creating their Facebook page? I mean, I have swore like three times in the last decade that a particular wedding in Margarita island was the last one I would attend, because flights to that island were regularly delayed at least two hours. And I reported my travails last summer when I was forced to go to Venezuela via Aruba for the simple reason that there was no other way to get there. So, where has INAC been all these years?

But more importantly, how does banning the sale of tickets “protect the users” or improve the on time arrival of planes? Obviously, the fewer passengers that fly, the easier the airlines can fill and empty airplanes and improve their on time record, but is that the point? And how are you protecting passengers when you ban the sale of tickets? When you do that, you limit the already severely hampered accessibility of flights, inconvenience people and really accomplish very little.

But as I was wondering over these issues, today INAC suspended the sale of tickets for five international airlines, who they are is irrelevant. What is relevant, and even more puzzling, is that the ban on the sales of tickets is only for Maiquetia airport…

Say what?

You are banning the sale of tickets to those that show up at the airport to buy a last minute ticket? Given how few empty seats they are, these are probably the neediest and the people most desperate to get somewhere. How are you protecting or helping them?

And last I heard, most airlines have websites, which allow you to reserve and buy tickets even with your telephone. So, what exactly is INAC accomplishing with this idiotic policy and ban on the sale of tickets?

I have no clue. (And please, get rid of those red vests on INAC personnel)

But if it is hard to understand these Government officials and where they have been for sixteen years, it is even harder to understand a certain Roberto Leon Parilli, President of ANAUCO, which is a private organization that is supposed to defend consumers. What Mr. Parilli did, was to ask the Government to intervene because airlines are selling airline tickets in foreign currency, which is illegal in Venezuela.He wants the Government to stop this practice.

Well, airlines are not selling tickets in dollars in Venezuela. Airlines are selling tickets to those that have a credit card in foreign currency and use it to buy a ticket online or via a travel agency (which place the order abroad). And if this path were blocked, the consumers that you are supposed to protect Mr. Parilli, would not be able to fly out of Venezuela. Because, Mr. Parilli, the Venezuelan Government has no money to pay its debt with the airlines, unless it devalues all exchange rates to around Bs. 70 per US$.

Got it? I doubt it!

In fact, the black market, which you are correct in denouncing Mr Parilli, would flourish if the Government somehow (I don’t see how it can do it, other than banning airlines from coming to the country) managed to stop the sale of tickets in foreign currency. Venezuelans would simply be trapped. Thank you Roberto!

In fact, if you want tickets to be cheap and readily available (in any currency) what your would need to do is to ask the Government to invite all major international airlines to add an unlimited number of flights without any restriction, including in which currency people can pay, eliminating reciprocity, quotas and the harassment of foreign airlines at Maiquetia airport.

The rest is simply being idiotic and clueless about what the consumer wants and how the market for airline tickets operates in the world.

58 Responses to “Idiocy And Airlines In Venezuela”

  1. miren este link …………… verán todas las irregularidades de @asercaairlines hagan sus conclusiones.

  2. Roy Says:

    They do not want normal Venezuelans to travel. According to the rules, if you can get a ticket to somewhere, the government has to give you your “cupo” in dollars. The less availability of tickets there is, the fewer dollars they need to issue to Venezuelans. But, of course, they still want the airlines to function, in case they want to go somewhere.

  3. W Says:

    the Conviasa owned Airbus A340-200 tail number YV1004 (the aircraft that was stranded in Bordeaux for unpaid maintenance bills) has retuned from Jordan with 116 Palestine “students”. Regarding the aircraft, it should return to scheduled service but if not, then there may be lingering issues that where not addressed during its stay in Bordeaux (Sabena-Technics maintenance, repair and overhaul facility). The other Airbus A340-300 is a wet-lease meaning it includes pilots and crews. In this picture, you can see the Conviasa stewards are criollo and the stewardresses are Asian:

    The regime was forced to wet-lease the A340-300 because their A340-200 was out of service. There may be other issues that see them preferring wet-lease over self-owned and operated. Obviously it’s a lot easier for them to outsource everything as they have proven very incompetent on their own.

    I would keep an eye out for the A340-200…does it return to service or do they park it?

    On another note, a criollo airline was shut down. Does this pave the way for new regime-friendly Navion Airlines? Will Navion buy the assets of the shuttered airline?

    On another other note, the regime is buying a lot of small business jets from North America for its internal use. The deal is getting scrutinized up here because it’s too close for comfort for some. There is a US Dept of Defense embargo against Venezuela and these aircraft, their use, and their crews (which have to be trained up here), need to be vetted first.

    • W Says:

      Wanna add that the A340-200 could also have been at Sogerma instead of Sabena. Both are located in Merignac, Bordeaux. The A340-200 had engines overhauled last summer:

      YV1004 A340-200 Conviasa

      That the picture shows Sogerma in the background does not mean they did the work.

      The photographer Guillaume Carré helped me last summer to find the presidential Airbus in Bordeaux. Guillaume has friends at Sabena and was able to provide lots of info!

    • Ira Says:

      It’s probably easier for those Palestinians to get basic goods in Gaza than in Caracas.

  4. Island Canuck Says:

    The airline Estelar has been closed by the government.
    The company has announced a plan to reimburse the cost of tickets.

    This is going to aggravate an already desperate problem of flights to Isla Margarita.
    They’ve been reporting for days that all were sold out for the Christmas / New Year’s vacation period

    The country is rapidly swirling towards the drain..

  5. Autobot Says:

    The idiocy is called “populism”.

  6. If the airlines have stranded profits I imagine Chevron, Total, Schlumberger, Halliburton, Wood Group and other large oil related corporations have been hiding billions in stranded profits. I’d love to audit their books and check how much they have written off and buried way down in their SEC filings. Or are they still pretending they make real money?

    • Caracas Canadian Says:

      An interesting study would be to review the books of most foreign publically traded companies dealing with Venezuela who have bolivar denominated earnings trapped in Venezuela. I would hazard a guess that at best these companies have written the earnings down to the SICAD I level. Maybe, if they have external auditors who are somewhat familiar with the Bolivarian farce they have been forced to write their earnings down to the SICAD II level when the reality is they should be writing them down to the dolartoday rate, or best, writing them off completely.

      I would be curious what advice Venezuelan accounting firms are giving to foreign auditors in the USA, Canada and Europe about writing down or writing off any bolivar denominated earnings. I would suspect that the Venezuelan accountants are probably being very economic with the truth while demanding to be paid only in dollars to give their opinion.

      I believe Air Canada for one has yet to write down their bolivars beyond SICAD I even though it will be a frosty day in hell before they see one dollar any of their bolivars….as a result they flew every Venezuelan who boarded their flight for free between 2012 and 2014.

      • moctavio Says:

        As long as the Government does not say it will not give it to them, they force them to register at 6.3 per $. The company could reserve it though. I believe if it is dividends, the Government already said it would not give them at 6.3 but it has not held a Sicad 1 auction for repatriation. Thus, companies have gone to Sicad 2 rate. You can not use the parallel rate, it is illegal.

  7. Vixtor Says:

    The government is as stupid as the people that support it. Unfortunately, Venezuelans deserve the government they have….

    • WET Says:

      Vixtor, you got something new and original to say? Venezuelans do not deserve that government. If you think pueblo is propping up the regime you are wrong. Firepower and money props the regime. Pueblo can come down from the cerros and march to Miraflores setting the stage for the military to take over but that scenario not in the cards because this regime will mow down anyone who dares get in the way.

  8. WET Says:

    The regime is increasing it’s widebody capacity. Conviasa now has two Airbus A340’s in service. One is theirs and the other is wet-leased. The A340-200 belonging to Conviasa returned to Venezuela a few weeks ago after a very long stay at Sabena-Technics MRO in Bordeaux. The reason for the extended stay was unpaid bills. This is the same reason the presidential Airbus A319-CJ was missing in Bordeaux for six months last year: unpaid bills. The A319-CJ was taken offline due to high operating costs and operational security concerns (bugs, secure comms) including pilot crews that require training and certification abroad (Miami). However, they replaced her with a VIP bird from Embraer. There is also a new airline called Navion. This project is closely tied to Andres Izarra and is leasing Boeing 767. Navion should start service very soon.

    • moctavio Says:

      Yeah, with 2 airplanes sreving Bogota, Miami, Madrid and who knows where else….

    • FrankPintor Says:

      Would it be a big deal for you to share more information about Navion?

      From one reads: “La empresa tiene apenas unas semanas de haberse constituido y en su portal web se informa que Navion iniciará operaciones el próximo mes y ofrecerá vuelos hacia los destinos de Cancún (México), Quito (Ecuador), La Habana (Cuba), Fort Lauderdale (EU) y Madrid (España), desde el Aeropuerto Internacional Simón Bolívar de Maiquetía, Venezuela”.

      What portal, webpage, when, how…?

      • WET Says:

        Frank, if you want to investigate Navion, I suggest you start with their website and their Facebook account. Pay attention to who owns the domain and who operates the Facebook account. He’s also their spokesperson. Look at the Facebook pictures and you tell me.

        • WET Says:

          Btw, the regime is known to close, modify and sterilize Facebooks accounts once the cat is out. In this case, they may want to take some of the images and content off the Facebook Navion site. Nothing major but not very professional.

      • WET Says:

        Frank, the airline has been in the works for over a year based on Internet trails. This means the project has been around for longer. The owners are not known. I see links to Andres Izarra. The chap who is the face of the airline comes from the lower classes and is probably a former soldier or officer. I would even dare say he was a paracaidista. If you look at his brothers and family through their facebook comments (the whole family is posting to the Navion facebook account), it seems the family comes from lower economic background (de barrio) and is now middle class. The whole thing is very unprofessional.

        • FrankPintor Says:

          OK, I found it,, it turns up eventually on the 5th page of a google search for Nation and Venezuela… I didn’t bother with a Facebook search, even though Venezuelan companies seem to prefer to present themselves online that way now, rather that with actual websites. They sure don’t know much about establishing a web presence, and the only thing of interest on their webpage is an apology for getting everyone excited about possible flights.

      • WET Says:

        The lease/wet-lease aircraft (and crews) from other airlines/companies. This works for them. Let others take care of the details. Navion is a testaferro airline IMO. I guess they figure with demand outstripping capacity, cheap fuel and home-turf advantage, why not get into the airline business. Besides, you want to have your own fleet to move people and goods around and that is way too important for this regime that built itself on its ability to span the globe using aircraft whether it be cocaine, arms, cash, valuables or people.

    • Miguel Octavio Says:

      The one they own, is not doing well, it has been back for repairs a few times. It finally arrived in Caracas but has yet to log a single commercial flight.

  9. Roger Says:

    In the past I always wondered why a ticket to Venezuela was so much cheaper than other places. My theory was cheap fuel when filling up in Venezuela? Of course at the same time, Avensa, Viasa and others went in and out of business on a regular basis due to their management skills. At some point the government decided to gouge the airlines with landing fees and fuel costs at MIA prices in USD. While most Venezuelans can’t even afford to even look at an airliner much less fly on one. There are some who are doing the corrupt revolution and have to pay into the corrupt economy to go to Miami and there are many who will spend their last Bolivar to escape what ever the cost. Many Cubans tell the story of having everything taken from them as they left for Miami and getting there with just the clothes on their back. The Fat Cats (Gato Gordos) don’t care. They fly private, PDVSA or government planes.

    • FrankPintor Says:

      “In the past I always wondered why a ticket to Venezuela was so much cheaper than other places”.

      Where do you shop?

      • Roger Says:

        Early 90’s it cost 100USD from MIA or JFK and 300 plus from Denver.

        • Caracas Canadian Says:

          Even as recently as 2008 I was paying about $ 700 round trip from Toronto to Caracas via Houston (Continental at the time) and about same via Miami (American) or Atlanta (Delta).

          • Ira Says:

            Roger, you have to be mistaken. It was never that cheap:

            In 88, when I started going, RT between JFK and Caracas was around $350 the lowest.

            • Ira Says:

              I won’t swear by this, now that I think about it!

              The ad agency I worked for had the Pan Am account, and I got 40% off the normal $350 RT between NYC and Maquetia. (Spelling?)

              However, I still usually flew Avensa, so even with my discount, Avensa must have been cheaper, or at least the same. (It’s horrible getting old and forgetting things.)

              Does anyone remember those great slippers that Avensa gave you to keep?

  10. Yuzhou Lin Says:

    I heard that the shortage of basic goods in Venezuela is getting better because many cheap Chinese goods are imported. I am very curious that since Chinese government already warn Chinese exporters that it is not a good idea to do business with Venezuela, how Venezuela get those cheap goods? do the government has enough dollars to pay for those goods?

    • FrankPintor Says:

      Good question, I’m also interested in this. I didn’t know that the Chinese Government had issued a warning like that. There is a currency exchange agreement in place between Venezuela and China, I believe, which makes bilateral business easier, and that trade agreement should have done away with the need for Dollars. And yes, there is lots of Chinese produce here, also lots of Chinese businesses, the most visible are restaurants and shoops, stocked with Chinese goods. They deal with the safety problems as best they can.

      • Yuzhou Lin Says:

        those warning usually are issued by government officers in local business meeting, so they are not real official warnings. if there exists a currency exchange agreement, i have to say the leaders of china are stupid.

      • Yuzhou Lin Says:

        i did some search. it seems there is no currency exchange agreement between china and Venezuela. and many Chinese businessmen complain that they can not get the payment for goods. and they only receive dollars as the payment.

        • FrankPintor Says:

          I’m not sure why we can’t find this currency exchange agreement, there was a lot of hype about it in Venezuela in 2012. China has signed quite a few currency swap agreements with Latin American countries.

          • Yuzhou Lin Says:

            Chinese central bank records show that china has currency exchange agreements with only two countries in south America, Brazil and Argentina. the leaders of Chinese government are not clever but not stupid. the only thing China can get from Venezuela is oil ,which we can buy it with US dollars. it is no needs for Chinese bank to hold Bolivars since even the prostitutes in Venezuela only receive US dollars, not mention the ridiculous inflation rate in Venezuela. I think either your government lie about the exchange agreement to people or there were only good wishes.

            • Halfempty Says:

              Thanks for your sluthing Yuzhou Lin, as you say, I think the alleged currency was only held out as a happy thought or perhaps a hope, during one of the high level visits.

    • Boludo Tejano Says:

      I am very curious that since Chinese government already warn Chinese exporters that it is not a good idea to do business with Venezuela….

      Here is an example of what you have pointed out. Daniel Duquenal, who blogs at Venezuela News and Views, recently made a business trip to Europe, and reported on his .
      Venezuela News and Views: Hyperinflation as a gateway to dollarization (or eurozization if you wish):

      But that was not the worst thing. Every one I approached did not want to do further business with Venezuela. Sure, they would sell me anything if I paid in advance which is impossible. Though understandable. But in one case there was that Chinese company who sent me packing. That is right, some in commie China do not want to deal with Venezuela EVEN if you pay in advance. It is not worth the bother between permits and assorted headaches from paper work. My investment talk were simply heard of with a lot of sympathy, the kind you use when your poor relatives try to convince you with a business proposal, before declining your participation in it.

      It is not only Chinese exporters who have decided it is not a good idea to do business with Venezuela.

  11. Eddie B Says:

    The ridiculously high ticket prices happened for two main reasons. The airlines weren’t stupid. They knew that their Venezuelan customers were willing to pay tens of thousands of bolivares to be able to travel to other countries and use their CADIVI dollars. Also, they knew that if they ever were able to trade Venezuelan currency into dollars, they would never be able to do it at the 6.3 rate, and the government would place all types of restrictions on the amount of dollars they could obtain. In the end, they may still take a big loss. The only real winners in this situation were the “raspacupos”.

  12. Paul Says:

    Venezuela would be hard pressed to actively seek out more incompetent people running government agencies. Is there any training in economics at all in Vzla? Even 18 year old college kids in the “Imperio” are a million times better versed in basic economic principles.God forbid Ebola ever makes its way there with total morons running things.

  13. daniel Says:

    The problem Miguel, is that the regime has an irrepressible desire to control all. there is no solution to that but their departure.

  14. moctavio Says:

    Sorry Frank, if they have not been given any dollars, it is monopoly money, it does not exist, it is not profits. They were getting paid with dealys, until they were not.

    Do you pray before you fly Conviasa?

    • FrankPintor Says:

      Of course, and that’s the point. The delays go way back, until 2012 if I’m correct? So, since then it’s always been monopoly money, you, I and everyone else with a clue knew that. Just the airlines made like Lord Nelson with the bad eye and the telescope, and instead of having things out in the open, screwed the Dollar-paying customers so they could keep the connections profitable and the Venezuelans flying for free (in real money). I mean, Avianca are selling Bogotá – Caracas for $800…

      Oh, and I pray before I fly Aeropostal, at least Conviasa has new-ish aircraft.

    • Wanley Says:

      Now it’s monopoly money. They were betting that it would be real money. They lost the bet and are making it up now. How does the government allow them to charge in dollars for flights originating in Venezuela? Is there a deal to allow them to gouge us in dollars in exchange for previous debt?

      • moctavio Says:

        They will never get paid the full amount, maybe 15-20%. The Government does not allow the, they dont sell tickets in Venezuela, period. I dont think they were betting. They thought they were going to get paid with delays. When they stopped believing that, they reduced flights and jacked up prices in dollars. They are no different than other companies that brought stuff at Bs. 4.3 and got paid at Bs. 6.3 (if they did). Airlines raise all sorts of emotions because people are affected directly. by what happened. Nobody complains about wine or scotch prices and they are dolarized too. To me it shows that Venezuelans have bought the Kool Aid of Government control so that they can benefit, not that things run the right way. It has become ingrained by now. Hopeless.

        • Wanley Says:

          True, everybody expects a free lunch. Plane tickets are not dollarized, they are gouging us. Government or airlines fault, we are being gouged. Triple and quadruple international prices? Are you kidding? Are the inefficiencies and distortions that big? You could make that argument when they were charging in bolivars and the prices were sky high in dollars depending on the exchange rates used, but hard currency? No way.

  15. FrankPintor Says:

    Well, I for one am pretty pissed off at the airlines for expecting me (paying in USD) to subsidise Venezuelans paying in worthless Bolivars. They certainly weren’t losing money on this, they are bad guys: they could have dollarized the whole thing a long time ago, but they chose to book a ridiculous exchange rate for accounting purposes and milk until now the customers who actually pay with money. And they allowed the “raspa-cupos” to fill their seats. Just to rub it in, all the airlines I know of actually exclude flights to Venezuela from redemption with frequent flyer miles.

    For the other airlines’ disloyalty to their money-paying customers I now fly Conviasa, those guys are so desperate for Dollars their prices are actually reasonable compared with the rest.

  16. Jose Says:

    Another good article Miguel, which reflects the poor judgment of this Gov. or perhaps more precise their lack of brain…
    What is shocking is that now the airlines are the bad guys!!! And the “people” buy that in a second without any memory of just the RECENT past.
    I think is extremely difficult for the average Venezuelan Joe to even imagine the very simple solutions that you mentioned, that’s not in the Vzlan DNA (including most of the opposition which seems to be just a different degree of people from the populist/left)
    BTW the article also reflects your frustration with what is happening in our country, you are not alone but hang in there, your articles are very well appreciated

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