September 16, 2014 / 5:13 AM / in 3 years

Venezuela airline crisis makes travelers ever more inventive

CARACAS (Reuters) - Buses across jungle borders, boats through Caribbean waters and private flights from small airfields have become a new norm for departing Venezuela as a multi-billion dollar pay dispute turns the country into something of a ‘no-fly’ zone.

Passengers walk at the airstrip as they arrive at Charallave airport outside Caracas September 15, 2014. REUTERS/Carlos Garcia Rawlins

Major international airlines have slashed seat availability by half since last year, pulling many routes entirely in a spat with Venezuela’s socialist government about the repatriation of $3.6 billion in ticket revenue.

The dwindling supply has sent prices spiraling for available seats, and led to a surge of more inventive travel itineraries via circuitous routes and other means.

“I’ve never flown private but I had to because you just can’t get a normal flight,” said Orinda Pamfil, 23, at the small, exclusive Charallave airport in hills outside Caracas.

Unable to find a commercial ticket to the United States, she was lucky to be traveling to Houston in a spare seat on a small plane owned by a friend of a friend. “It’s impossible for normal Venezuelans to travel,” she said, clutching designer luggage.

Hiring a seven-seat private plane, such as a Learjet 55, costs upwards of $2,500 per hour, said private pilot Carlos da Silva. Used to flying super-wealthy clients, he is now receiving calls from groups of middle-class Venezuelans looking to share costs.

“There’s been a surge in demand because people are desperate,” added another pilot Nicolas Veloz who estimated demand was up at least 20 percent in recent months.

“They have business, school, health issues abroad. Sometimes people just have to get out in an emergency.”

Venezuelans unable to afford private planes or find a rare seat on a commercial flight are taking more laborious trips across land and sea.

On a recent morning at Caracas’ tiny Rutas de America bus terminal, 39-year-old Yane Gonzalez was about to take a four-day trip across the Andes via Colombia to the Peruvian capital Lima thousands of kilometers away.

“Of course I’d rather fly!” said Gonzalez, who was giving up her work selling snacks at a kiosk in Caracas to begin a new life in Peru. “But we go to the airline and they have no seats.”

CURRENCY COMPLICATIONS

The airline problem, the latest manifestation of multiple strains across the Venezuelan economy, derives from a government requirement that domestic ticket sales be in local currency.

Some 24 airlines have built up the equivalent of $3.6 billion in bolivars but are unable to convert that money into hard currency, according to the International Air Transport Association (IATA). This is due to delays in authorizations from the government which, for over a decade, has operated strict foreign exchange controls.

“The country unfortunately is disconnecting from the world economy and runs the risk of deeper isolation,” said Jason Sinclair, an IATA spokesman. “It simply is not sustainable for the airlines to fly to a country where they cannot be paid.”

Negotiations are underway and around a third of the airlines have reached agreements in principle but the terms are incomplete and “lack any form of guarantees”, Sinclair said.

International airlines have cut seat availability in and out of Venezuela by 49 per cent on last year, IATA said.

Major airlines including Air Canada ACb.TO and Alitalia earlier this year suspended all flights, citing safety concerns and difficulty in repatriating revenue.

Alitalia began flying again earlier this month, though with a limited service.

A plethora of others, including American Airlines AAL.O, Delta Airlines DAL.N and United Airlines UAL.N, slashed most but not all flights earlier this year. European airlines including Lufthansa LHAG.DE and Iberia have also cut routes.

CAPITALIST ‘WAR’

Caracas was American Airlines’ first destination in South America more than a quarter-century ago but the carrier cut almost 80 percent of its weekly flights to Venezuela in June.

The airline said it is owed $791 million. It still runs 10 weekly flights to Venezuela from Miami, though these can now only be paid for abroad in hard currency.

A Miami to Caracas return on American Airlines - a six-hour flight - for next month is listed at $2,000. A comparable flight from Miami to Bogota, in neighboring Colombia, is around $750.

Though his ministers are in discussions with the airlines, President Nicolas Maduro has cast the problem as part of an “economic war” against him by capitalist foes and has threatened airlines that pull out with permanent expulsion.

“Whoever leaves Venezuela in the midst of this economic war doesn’t return ... because Venezuela must be respected,” said Maduro.

He has kept the socialist policies and currency controls of his predecessor Hugo Chavez, who died of cancer last year, but he faces a plethora of problems from shortages of goods to high inflation and an economy that analysts say is in recession.

Venezuela’s domestic carriers are also struggling because they find it hard to obtain dollars to import parts for maintenance. This has led to a severe shortage of flights, adding to angst for travelers.

“There are aircraft just sitting on the tarmac (at public airports) because they don’t have parts,” pilot Veloz added.

Some travelers are finding friends or companies with boats to take them to the nearby Caribbean islands such as Aruba, Curacao and Trinidad where onward flight availability to popular destinations like New York or Miami is much easier.

One travel agent struggling to find a customer flights to the nearby tourist islands of Los Roques suggested hiring a private catamaran instead.

Many travel agents are struggling to make a living. They protested earlier this year outside the tourism ministry and some have given up their work.

Others are up for the challenge.

“If you’re young, rich and agile, you’ll find a way to get out,” said travel agent Doris Gaal. “But it’s not going to be easy.”

Editing by Andrew Cawthorne and Kieran Murray

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