Is 2014 the year of the plane crashes?

What’s going on?

I can’t answer that question. I’m not part of the Air Crash Investigation team. But I can tell you that this will not be an article detailing what happened to the MH370, MH17, GE222 or AH5017 flights. There are enough articles, ongoing stories, speculations and conspiracy theories about those four incidents all over the internet which you can easily find should you be interested. With this article I will attempt to shed some light on why 2014 seems to be such a bad year when it comes to commercial airline incidents.

This article handles commercial airline incidents. In 2013 a total of 138 plane crashes happened, but just 12 of those were commercial flights.

So, is 2014 the year of the plane crashes?

It certainly seems to feel that way. First Malaysian Airlines MH370 disappears, then Malaysian Airlines MH17 gets shot down, shortly after TransAsia flight GE222 crashed due to bad weather and the very next day AH5017 crashes, also believed due to bad weather though this is still being investigated.

However, the short answer to the question is: no. Continue reading

Venezuela, flights to Caracas suspended. But why?

To start off with, it’s not because the airlines are trying to annoy you. They are protecting their business interest and possibly writing off millions of dollars. As usual, it’s all about the money …

US dollars and Venezuelan bolivars

US dollars and Venezuelan bolivars

It all started with former President Hugo Chávez. In 2003 he initiated currency control measures in order to prevent capital flight. Capital flight just means that a lot of money is flowing abroad, leaving less money inside the country itself. The reason why this was happening was devaluation of the Venezuelan Bolivar (VEF). Since the currency control measures have been put into place, the Bolivar was devalued 5 more times. Which is kind of sad, because the Bolivar has been the strongest currency in the region for a long time.

To put it blunt, the local currency isn’t worth much anymore now. Much like in Cambodia, the American Dollar, which is a lot more stable, is worth a lot more. Theoretically this shouldn’t be a problem because every currency has an exchange rate. But as any traveller will know, there are always multiple exchange rates. And the one that is very interesting for the Venezuelans now is the black market.

So let’s get to the core of the issue, and explain this in a very basic way:

Officially – 1 USD is worth 6.3VEF
Unofficially – 1 USD is worth 73VEF

So people are flooding to the black markets to sell their dollars. And how do they get those dollars? They buy flight tickets to the US, get as many dollars as they can and fly back to sell them on the black market. This maneuver is known as “el raspadito” or “the scrape”, because everyone is scraping to get a flight ticket/dollars. It’s even possible for Venezuelans to go on holiday for free this way, because they are able to sell the dollars for more Bolivar than they used to paid their trip.

Flights are booked full months in advance. Travel agents even advise people who really do need to travel to take a boat instead of a flight because there simply aren’t enough seats … at least not on paper. Because you don’t necessarily have to actually get on the plane! Venezuelans can buy “cheap” dollars at the official 6.3 rate, but there is a limit to how many they can buy. However there is a way around that. You can buy up to $3000 dollars at the 6.3 rate if you are a traveller. And you are a traveller if … you have a flight ticket. You can see where this is going, right?

Maiquetia airport

Caracas Maiquetia airport

Venezuelans have become very good at working this dual exchange rate system to squeeze as much money out of it. Some will just send credit cards abroad so they can be swiped for cash advances. Financially, there are tons of ways to abuse this system, and the Venezuelans know it.

But so do the airlines. Because all flights have been booked “full” months in advance, the prices have been soaring. Depending on the destination, a return flight to/from Caracas can now set you back between $2.000 and $5.000. Part of the reason is the increased “popularity” in the destination (economics says when the demand is high the price will go up). But the airlines have another reason for this, they are trying to discourage people to buy a seat which they’re not going to use anyway. Airlines are tired of “fully booked” planes leaving almost half empty while real passengers have been unable to get a seat. So airlines have started to overbook flights. Not just by a bit, but by a large margin.

When you put all this together on the scale you should look at it, the size of the country itself, you’ll see that this country is heading for large scale problems. The Venezuelan Bolivar is losing ground, the American Dollar is taking over and of course corruption is a big problem itself. The people can see what’s happening and there is civil unrest. Many Venezuelans have moved to Colombia. All this causes economical and political instability. The government tries to combat this situation before it all collapses. The easiest way to do this is to get more money into the system and prevent money from going back out.

The Venezuelan government has taken measures and placed currency restrictions on airlines. That means that airlines are unable to convert their Venezuelan earnings into Dollars. The figures go into the millions of dollars per airline that are now stuck in the country. It doesn’t need explaining how the airlines feel about all this. So in order to try and limit the amount of money that they will possibly lose due to it being stuck in an economically unstable country and currency, they have reduced the number of flights or suspended them altogether.

Airlines that have reduced or suspended their flights do plan on resuming regular operations when they are satisfied that the situation has been stabilized. If you have a ticket but your flight has been suspended, contact the airline. They will refund you. Or if you are in Venezuela already, they will rebook you to another airline or help you in any way to get you back.

As always, enjoy!