Venezuela to support private airlines' aircraft renewal

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The Venezuelan government has agreed to financially support private airlines wishing to renew their aging fleet by providing them with the foreign currency required to acquire new or "semi-new" aircraft.

The could mean an immediate need for 30 aircraft, and up to 100 aircraft in the longer term.

Venezuela, despite being one of the oil-richest countries in the world, applies very restrictive currency controls, which has created significant difficulties for domestic carriers. These airlines charge for fares in Bolivars, but pay lease rates and maintenance costs in foreign currencies.

A transport ministry spokesperson says Venezuela's transport minister Elsa Gutierrez is aware of a need to support private carriers, which transport most of the country's domestic passengers.

She adds: "Venezuela already took a bold decision when ordering 20 new jets for [state-owned] Conviasa."

Last July, Conviasa ordered six Embraer 190 aircraft, plus 14 options.

The spokesperson could not provide further details on the government's plan, although she confirmed that carriers who want to acquire new aircraft will have access to "the necessary foreign currencies".

The official monetary exchange rate is kept artificially at 4.3 bolivars to the US dollar, but on the black market a US dollar is worth up to 20 bolivars. Despite the huge discrepancy, even international airlines occasionally use the informal market exchange to transfer money out of the country because, even at the government rate, US dollars are hard to obtain.

A source familiar with the situation says that the government is studying different options to help the country's carriers to overcome currency restrictions.

The condition of Venezuela's in-service fleet is desolate and several of fuel-guzzling Boeing 737-200s and DC9s have been operating for more than 40 years and have reached the maximum cycles they were designed for. None of the aircraft operated by the country's private carriers have a build date after 1990. Venezuela also has one of the poorest safety records in the region.