The Venezuelan supreme court is set to rule on Avensa's challenge to an attempt by General Moises Orozco, minister of transport, to revoke its 1987 award of European routes. Avensa did not operate those routes during a period when former flag carrier Viasa was also flying to Europe.

Orozco contends his predecessor's route awards to Avensa were illegal and, in any event, Avensa lacks the right equipment now to operate those routes under current regulations. Avensa asserts that the only grounds listed in the statute for forfeiting route awards are bankruptcy, and if its award was illegal, then every other airline in Venezuela is operating under a similar illegal basis. On the question of equipment, Avensa argues it will acquire whatever it needs once the court confirms its right to operate.

Miami-based consultant, Julian Servillano, says the court's decision could resolve another dispute over who owns the routes that bankrupt Viasa once flew. Caracas is trying to sell Viasa's remaining assets, including those routes, as a package. Venezuela's other airlines have filed suit, claiming under the same statute at issue in Avensa's case, that Viasa forfeited those routes when it filed bankruptcy.

Orozco's view seems to have changed. His current position is that the government can sell Viasa's routes along with its other assets. Last July, however, he claimed Viasa's routes had reverted to the government and were available for reallocation to other airlines.

Servillano notes that the situation could change in December, when Venezuela plans to hold national elections, and points out that Viasa's unions still wield a strong influence.

Source: Airline Business