MIAMI — Venezuelan dictator Nicolas Maduro announced yesterday that Turkish Airlines (TK) will open up a base in Caracas (CCS) to exploit “Latin American and Caribbean” operations.
This unexpected announcement was made by Maduro from Ankara, where he is holding meetings with Turkey’s President, Recep Tayyip Erdogan.
Maduro also said that Turkey and Venezuela have moved forward in commercial agreements that will “boost Venezuela’s economy.”
“We have talked about air connectivity here,” said Maduro. “We are moving forward with Turkish Airlines opening a base in Venezuela for all their Latin American and Caribbean operations, which makes us feel very optimistic.”
The Venezuelan president admitted that “Turkey is a leading country for the emerging world,” and that he took with him a big delegation of Venezuelan politicians to “strengthen the ties between both countries.”Maduro also said that both countries have reached gold exploitation agreements.
“Venezuela is one of the world’s top gold reserves. We are investing to make our country a leading gold production and exportation one,” he said.
Venezuela Sinking In Worldwide Sanctions
Maduro revealed that this new relationship with Turkey will alleviate Venezuela’s current economic problems.”We have brought a detailed document including all the investment opportunities in Venezuela. This is something we have never done before. It’s the first time Venezuela takes an investment proposal to an international country.”
Venezuela is immersing in a steep economic and humanitarian crisis. Economists calculate the projected hyperinflation state at 46,305% by the end of June—the world’s largest, and by a long shot.
— Prof. Steve Hanke (@steve_hanke) July 2, 2018
On top of the economic woes, Venezuela is also crippled by worldwide economic sanctions.
In May, US President Donald Trump placed additional bans against the South American country, seeking to block Maduro from selling off more Venezuelan debt to finance his authoritarian regime.Trump signed an executive decree imposing penalties on US companies and citizens that might interact with the Venezuelan administration.
Moreover, the European Union (EU) imposed severe sanctions against the self-proclaimed Venezuelan regime. The EU first imposed targeted measures against the South American country in January 2018.
Just recently, those measures were incremented. The commission stated that the Maduro regime is involved in the “non-respect of democratic principles or the rule of law as well as in the violation of human rights.
“With Turkey being the only country that has welcomed Maduro since Venezuela’s fraudulent elections in May, the likelihood of both countries doing business with the vast gold reserves in the South American country is high.
The Venezuelan Aviation Scene
The commercial aviation landscape in Venezuela is also declining, with most of the domestic carriers disappearing and the internationals fleeing away.
Both SBA Airlines and Aserca Airlines recently ceased operations after more than 30 years of continued service.
State-run Conviasa has only a small percentage of its relatively new fleet of Embraer E190s working, flying only domestic routes because international destinations are not welcoming the regime’s airline.
Both Avior and Laser Airlines remain as the country’s strongest, both filling the void left by SBA Airlines on flights to Miami through partnerships with World Atlantic and SwiftAir. Both carriers also fly to Dominican Republic, Aruba, and Panama.
A third Venezuelan carrier, Estelar, has wet-leased a Hi Fly Airbus A340-300 to offer point-to-point services to Santiago (SCL), and Madrid (MAD). However, the long-term viability of this service is low. As far as international connectivity is concerned, only six European airlines remain operating regularly to Caracas.
Iberia, Air Europa, Air France, TAP Portugal, and Turkish Airlines, offer flights to Europe from three to four times per week.
Just recently, Spanish charter carrier PlusExtra opened up flights to Tenerife (TFN) and Madrid (MAD) with its Airbus A340-300. Again, the point-to-point viability of these flights is low in the long-run.
Plus Extra seems to be partnering with the Venezuelan government, which might be subsidizing this route following the void left by Conviasa and SBA Airlines.
To the US, the only international carrier left is American Airlines (AA), which has just announced an increase in frequency from 10 weekly flights up to 14. The airline also increased capacity by changing its second daily flight from a Boeing 737-800 up to a 757-200.
Turkish Base In Caracas?
Even though Turkish Airlines has not released a statement confirming or denying Maduro’s claims, it is highly unlikely that the airline will open up a base in Caracas.
For this to happen, the airline would need to guarantee a high flow of passengers through the Caracas airport, which has endless logistical deficiencies for any hub operation.
Turkish Airlines would also need to guarantee high load factors in a country where foreign currencies are banned by a currency exchange control. Today, freely exchanging US Dollars at real market rates is illegal. The Venezuelan government forces its citizens to exchange international currencies at rates that are unrealistically fixed by them.
From the Latin American network perspective, the airline already flies from Istanbul (IST) to Sao Paulo (GRU), Buenos Aires (EZE), Bogota (BOG), Havana (HAV), Panama (PTY), and Caracas.
Therefore, opening a base in Caracas would only give them access to routes they already serve (BOG, PTY, HAV), and the potential opening of more Latin American and Caribbean destinations is unnecessary for the airline’s vast network.
Overall, it seems like Maduro’s statement was purely political. Airways is expecting a statement from Turkish Airlines on the matter and will update this story as soon as it arrives.