4/02/1961: VIASA Completes First Commercial Flight

DALLAS — Today, in 1961, Venezuelan flag carrier VIASA completed its first commercial flight, hand in hand with KLM (KL). The flight to Amsterdam left Caracas with stops in Santa María (Azores), Lisbon, Madrid, and Rome. As with the rest of the world, the golden age of travel had just begun for Venezuelan commercial aviation.

On the carrier's return trip, flights would continue beyond Caracas to Curacao (CUR), Bogotá (BOG), and Lima (LIM). This international operation enabled Caracas-Simón Bolívar International Airport (CCS) to become the prime gateway to the Americas, a status that remained unchallenged until the demise of VIASA.

Venezolana Internacional de Aviación Sociedad Anónima, or VIASA, was the country's flag carrier between 1960 and 1997. Its headquarters were in Caracas, at the Viasa Tower (Torre Viasa). During its 37-year lifespan, the airline's subsequent public and private management could not maintain its continuity.

The airline was established in November 1960, nationalized in 1975 due to financial difficulties, and re-privatized in 1991, with Iberia (IB) owning the majority stake. After ceasing operations, the company went into liquidation in January 1997.

Gateway to the Americas: VIASA's Early Years

In 1959, the Venezuelan government envisioned VIASA as a new company that could act as the country's flag carrier, operating independently of government interference.

In August 1959, Línea Aeropostal Venezolana (LAV) and AVENSA began to explore the possibility of establishing a new international airline. In April 1960, LAV proposed a 50-50 state-owned and private company. Negotiations continued, and two months later, both airlines agreed to set up a new carrier.

The new carrier would ultimately take over LAV's international division assets and an order for two Convair 880-22Ms intended for AVENSA. LAV subscribed 55% of the shares, and AVENSA the remaining 45%. The capital raised was VEB12 million, equivalent to roughly US$3.6 million in cash at that time (around US$32 million in 2024 figures).

The airline signed an agreement with KL in early 1961 to operate a Douglas DC-8 on VA's behalf, with plans to begin service to Europe in April of that year; KL nurtured the relationship with VA for another 24 years. In addition, AVENSA transferred two Douglas DC-6Bs to VA in the same year. As for the Convair 880s, the airline mostly used the type on routes to North America.

In 1961, the airline became the 89th member of the International Air Transport Association (IATA). In 1963, VA began a commercial agreement with IB and KL for operations in the mid-Atlantic region, spearheading Caracas and CCS as the gateway hub of the Americas.

Since its inception, VIASA has been a model of good management, returning a profit every year. However, due to fuel costs and labor disputes, Viasa recorded its first-ever loss for the fiscal year from October 1975 to September 1976. Still, the airline's success exemplified how a mixed private/state-owned airline could work.

Nationalization, Privatization, Downfall

VIASA was nationalized by the government in 1975, and the airline's decline soon began. The fall was initially buffered since Venezuela's strong economy was focused on high oil revenues, and the state was willing to pump money in to cover the carrier's mounting losses.

In the years before the carrier's privatization, the Venezuelan government kept VIASA on life support. By 1990, the government put the airline out to bid, inviting North American, European, and Asian airlines to invest. But there were no offers for the debt-ridden airline.

Finally, in June 1991, IB and KLM were approved as bidders in the privatization process: the former, an old ally, teaming up with Venezuela's Banco Provincial, and the latter partnering with Northwest Airlines and four other local entities. Grupo Iberia won the bid.

As it had with Aerolineas Argentinas (AR) and Chile's LADECO (UC), the IB planned to develop a regional hub in Caracas to channel Iberia flights to its central hub in Madrid. At that time, IB was a state-owned airline, and it soon became apparent that it lacked the expertise required to solve VIASA's issues, being unable to control the carrier during the six years it had control over to change the fate of VA.

Iberia suspended VA operations on January 23, 1997, and in March, the Venezuelan government and IB decided to liquidate the airline. The last VIASA flight was VA3735, a DC-10 charter flight from Billund (BLL) to Porlamar.

VIASA had become a symbol of Venezuela's stability and success and a flag carrier of which to be proud. Additionally, VA is credited with being the world's first all-jet airline and the first jumbo jet operator in Latin America.

Article sources: El Estimulo.

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For all the right and wrong reasons, Venezuela's most-remembered carrier is often referred to as a business case study. To read the full story of VIASA, subscribe or purchase the March/April 2022 issue of Airways to read "VIASA: Venezuela's Clockwork Orange," by Roberto Leiro.