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  HOME | Opinion (Click here for more)

VenEconomy: Who’s to Blame for High Airline Fares in Venezuela?

From the Editors of VenEconomy

In a strategy to avoid responsibility for the ongoing economic crisis and the drought of dollars, the government of Nicolás Maduro has started to point his finger at everyone. From the “Empire,” the “parasitic bourgeois” (as he refers to his political enemies), business organizations such as Fedecámaras, Consecomercio, VenAmCham, the media, the travelers using their Cadivi dollars quota abroad, and also airlines with operations in Venezuela.

This last accusation came from Eduardo Samán, president of Indepabis, or the State’s consumer protection agency, who claimed a week ago that airlines would be using “strategies to collect dollars in detriment to the passengers who want traveling abroad and cannot do so since airline tickets are way too expensive.” He pointed out that “those stealing the dollars, those sucking up the dollars are, without a doubt, the airlines in complicity with some travel agencies.” He complained about airlines raising the dollar fares obtained from Cadivi, the country’s foreign exchange authority, twice or three times as much as they restrict the ticket supplies in both economy and tourist class.

An allegation that, following the pattern of attacks against the private sector over the past fifteen years, comes along with threats of starting a series of audits “from travel agencies, airlines to ticket booths at airports in a bid to put a break on high fares.” The governmental bodies in charge to carry out these audits would be Indepabis, Cadivi, the National Institute of Civil Aeronautics (INAC) and the Ministry of Tourism.

Samán is not paying heed to explanations from representatives of the airlines and much less goes through his head the fact that this sector, as many of the other productive sectors, has been strangled by wrong foreign exchange policies and a lazy government that currently accumulates some $2 billion in debt with the airlines operating in the country. These have been increasing their fares so they can protect themselves against the devaluation of the bolivar, the national currency, but the alleged “inflated” fares are no protection against a devaluation of, say, Bs.10 per dollar, for example. Besides, if that was the case, there are little chances for Cadivi to allocate a fair amount of dollars at the disposal of airlines, even after the expected devaluation.

For their part, national airlines are also dealing with the implications since as it has been usual, the regulation of fares imposed by the Government does not cover the costs and forces them to operate at a loss. On top of this, Cadivi is shelving most of the applications for dollars to privately-run airlines, which means airlines have not been able to upgrade their fleets and are running out of spare parts, and as a result the national airlines fleet has become the most outdated one on the planet.

The aftermath is that the Government’s hands are strangling another private sector, but at the same time this sector is being held responsible before the public opinion, while the population deals with the implications of the lack and high costs of airline tickets.

VenEconomy has been a leading provider of consultancy on financial, political and economic data in Venezuela since 1982.

Click here to read this in Spanish

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