Venezuela wins safety showdown

Source:
This story is sourced from Airline Business
Subscribe today »

David Knibb / Seattle

Venezuela’s showdown with the FAA is historic in several ways. It is the first time a Latin nation has threatened to cut flights by US carriers because of the imbalance caused by category 2. It is also the first time that the FAA has agreed to reassess a nation’s air safety under such a threat. And it is a strategy that has obviously worked.

All three of Venezuela’s major airlines – Aeropostal, Santa Barbara, and government-owned Conviasa – are busy planning new routes to the USA. Venezuela’s victory also opens the door for codeshares between them and the US carriers that serve Venezuela – American, Continental and Delta Air Lines.

It remains to be seen if other Latin nations that languish in category 2 will resort to Venezuela’s approach, but even if they do not, its victory will boost Venezuela’s growing influence in Latin affairs that directly or indirectly affect aviation (also see Feedback on page 90).

Detractors call Venezuela’s controversial president Hugo Chavez “a Castro with money” because of his views and willingness to spend oil revenue on Latin American projects. Cuba and most of Central America now have favourable oil supply contracts with Venezuela. A new pipeline from Venezuela’s gas reserves to Brazil and Argentina is due to open in June. Ecuador is using a loan from Venezuela to pay debts, and Chavez has just signed a pact with his Bolivian counterpart that offers Venezuelan aid for a host of projects. In such ways some Latin nations are becoming dependent on Venezuela.

How this will play out in aviation remains to be seen. Some observers criticise Venezuela’s policies as divisive. They cite Chavez’s recent decision to pull out of the Andean Community, which includes Venezuela, Colombia, Ecuador, Peru, and Bolivia, after some members signed free trade deals with the USA. Not only does this undercut co-operation between the Andean Community and Mercosur, but it could end the current open-skies regime between the Andean nations.

The success of Chavez in Venezuela has emboldened other Latin politicians with a nationalistic tilt. One of the most noteable is Ollanta Humala, who could become Peru’s next president after runoff elections in June. Humala has raised concerns at Lan Peru with suggestions that Chilean interests control the airline and Chile did not treat Peru’s Aerocontinente very well several years ago.

One of the most direct effects of Venezuela’s growing influence is in Uruguay. Montevideo has agreed that Venezuela’s Conviasa may buy Varig’s 49% stake in Uruguay’s Pluna. Once Conviasa closes this deal with Varig and Brazil’s bankruptcy court, it plans to offer Pluna a $5 million line of credit to upgrade its fleet. It is possible that Conviasa could take over Pluna’s management. ■