Last month, American Airlines announced increased service to Caracas, Venezuela. While other U.S. and European carriers have abandoned air service to the beleaguered nation, AA has steadfastly remained. But that could soon change.
American flies twice daily to Caracas and once daily to Maracaibo. In December, AA will fly three times daily on select days. But thanks to the latest display of desperation by the Maduro regime, all of those flights are in jeopardy.
Earlier this year, Venezuela introduced the Petro, a cyrpotcurrency intended to be a stable alternative to the plummeting bolívar fuerte. It is allegedly backed by the country’s oil and mineral reserves, but has been overwhelmingly labeled a scam by economists.
The Petro was not just intended to stabilize the economy, but to circumvent sanctions levied against the Venezuelan government by western nations. Russia provided aid and consultation in the creation of this new currency and Russian President Vladimir Putin was purportedly personally involved. The U.S. Department of Treasury warned that participating in the Petro program would violate U.S. sanctions. Last month, President Donald Trump signed an executive order banning all Americans from using the Venezuelan cryptocurrency. Maduro called the ban a “crime against humanity.”
New Rule: Gasoline Only Sold in Petros to International Airlines
This week Venezuela introduced a new rule that international airlines must purchase Venezuelan fuel exclusively in Petros. The move puts American Airlines in a particularly difficult position.
Since AA cannot legally own, obtain, or trade in Petros, it has a number of options:
- Provision aircrafts with sufficient fuel to make a return trip (MIA-CCS is 2,720 miles r/t)
- Add a technical stop, like United did in Aruba during its final month of service to Caracas
- Suspend service
While the third choice is not necessary, it is not inconceivable that AA might consolidate flights into one larger 757 aircraft with a greater range. AA currently uses a mix of 737s and 757s on the route.
Every act of desperation by the Venezuelan regime moves the country closer to collapse. The Petro has been overwhelmingly called a scam. Will this latest restriction force American Airlines or Air France to abandon Venezuela or scale back service further? We’ll soon find out.