Behind the Scenes: Demise of SBA, Aserca, PAWA Dominicana

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Behind the Scenes: Demise of SBA, Aserca, PAWA Dominicana

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https://airwaysmag.com/airlines/behind- ... ominicana/

Behind the Scenes: The Demise of SBA, Aserca, PAWA Dominicana
Joao Carlos Medau
February 18, 2018

MIAMI

Three carriers, one fate. Venezuelan SBA Airlines (S3) and Aserca Airlines (R7), together with sister carrier from the Dominican Republic, PAWA Dominicana (7Q), have all gone belly up in the span of a few weeks.

The three carriers, owned by the same conglomerate, Grupo Condor, have either been revoked of their flying permits, their assets have been seized by the governments in which they operate, or simply have run out of cash to pay for insurance.

The Grupo Condor, presided—and owned—by Venezuelan entrepreneur Simeon Garcia, has been a crucial long-time player in the country’s commercial aviation scene, owning SBA, Aserca, and a tourist-focused, small regional carrier called LTA Aerotuy.

SBA Airlines—the country’s leading carrier since the demise of VIASA and AVENSA—operated a large number of regional, narrow-body, and wide-body planes to a vast amount of destinations, including Madrid, Tenerife, Miami, and Panama.

At one point, SBA had a relatively strong fleet of three Boeing 767-300ERs and four 757-200s, with which the airline flew overseas to Europe and Miami several times per day.

However, as the economic health of the radical South American country faded, so did both SBA and Aserca Airlines. “But not for the same reasons,” tells Airways an Aserca Pilot who desires to remain anonymous due to the risk of being reprimanded by Venezuelan authorities.

“Even though Venezuela’s communist regime brought down the country’s economy to its knees, both Aserca and SBA were mismanaged. The owners never cared to keep us happy. They owe us a lot of money. They purchased wrong parts for their airplanes, grounding them indefinitely. They left thousands of passengers stranded (…), and now they fled the country hiding from their responsibilities,” he revealed.
Aserca Runs Out Of Cash

Similarly, Aserca Airlines—the country’s historic domestic carrier—announced on Friday that its operations were suspended “due to technical reasons.”

However, in reality, the airline had run out of funds to pay for the insurance of its last McDonnell-Douglas MD-83 (YV2971), as published by INAC, contradicting the airline’s public statement.

Reportedly, all pilots sat at home waiting for a call to operate a 30-minute flight. Today, however, this wait has ended with the terrible news that the airline cannot operate flights any longer.

The airline has 10 McDonnell-Douglas MD-80s, with an average age of 29 years. The latest one to remain in operation was originally delivered in 1997 to Alaska Airlines. Today, all these planes are grounded at Caracas – Maiquetia International Airport (CCS).
The PAWA Scam

As desperate Aserca pilots tried to fulfill their contracts, other “more fortunate” pilots had been assigned to the group’s carrier in the Dominican Republic, PAWA Dominicana.

A former Aserca MD-80 Pilot was granted the opportunity to fly for the Dominican carrier through his contract with Aserca Airlines.

“We never had a formal relationship with PAWA,” he tells Airways. “Our contracts were with Aserca, and we were given a daily stipend of about $130 to fly the PAWA jets.”

Such stipend, for a Venezuelan Pilot, is remarkable. With a recorded inflation rate of 2616% in 2017, earning money in foreign currency is a privilege. Venezuela’s economy has been listed as the only one with hyper inflation rates in the globe.

According to him, PAWA’s pilots were purposely picked from Aserca because of specific qualifications. “My English was good enough, and I had a good amount of hours as Captain on the MD-80,” he explained.
READ MORE: Venezuela’s Avior Airlines Blacklisted by European Union

“But we had nothing to do with the airline’s management,” he said.

According to the Captain, PAWA was in “great shape” when he first started flying their planes. “They had six MD-80s operating at full swing. They had high load factors, and we flew regularly. However, six months later, they only had two planes. And today, they have none,” he said.

The decline in the airline’s operations was evident. Several planes were grounded because of missing parts, and even though load factors remained high, the financial difficulties crippled the airline rigorously.

“PAWA is a scam,” said a Venezuelan travel agent who also wishes to remain anonymous. “They sold us a travel package for four passengers. When their flights were ultimately canceled, the airline didn’t assist our clients or even gave them a refund. They had to find their way back home on their own,” she said.

In the Dominican Republic, PAWA Dominicana’s assets were seized by the country’s authorities, and the airline’s President, Gary Stone, was taken into custody as he tried to flee to Miami on the first week of February.

“PAWA has been suspended for three months due to the lack of payments to the Dominican government, private institutions, and airport handling companies,” published the Dominican newspaper Expreso.

“PAWA owes more than $7 million to Aerodom, the country’s main airport handler.”

Pilots, flight attendants, staff members of all three carriers were, therefore, left without a job. “There was no compensation. We just don’t know what’s going to happen to us,” one Aserca Pilot said.

SBA Airlines – AOC Revoked

In Venezuela, the National Institute of Civil Aviation (INAC) revoked the Air Services Operator Certificate (AOC) of the ill-fated SBA Airlines (SBA) last month.

The sanction has been imposed for at least 90 days because the airline continuously breached its schedules and services, therefore grounding all its aircraft because of a severe lack of funds.

According to INAC, to keep the AOC, the airline must demonstrate “the adequate accomplishment of the technical and legal procedures, which may determine or not the reboot of operations.”

To continue serving their passengers on the coveted Caracas – Miami route, SBA Airlines had to wet-lease several Aruba Airlines Airbus A320s.

However, after running out of funds, the airline had to pull the plug and announce the cancellation of all their flights in late November—one month ahead of the busiest time of the year.

The airline announced that it would not be able to operate all its flights from Caracas to Miami until January 15, 2018, citing operative issues with its fleet. The airline also said that all tickets were not to be rescheduled, but refunded.

However, the airline never resumed operations and the aviation authorities revoked its AOC in January.

INAC reaffirmed through a release their intention to supervise the fulfillment of the aviation duties SBA Airlines has with its passengers and cargo, as well as the protection of the airline’s workers and passengers affected by the circumstances.

“The main problem with the airline has been its terrible management,” says an SBA Boeing 767 First Officer. “Because of them, all of us, pilots and workers, have been treated with insolence and haven’t been paid in a very long time.”

SBA pilots were usually granted US$1,200 and First Officers $780 as a monthly bonus to cope with the rising inflation that has crippled the Venezuelan economy since 2014.

“They haven’t paid us in over eight months,” said another Boeing 767 Captain who is now moving to Hong Kong to search for new job opportunities.

“Because of the terrible management and corrupt environment in which these two airlines operate, I’m now forced to move to Asia to look for better flying opportunities,” he said.

And corruption seems to have stirred the airline’s management for a long time. “Just like the country, corruption is the modus operandi at these airlines,” the 767 Captain says. “Not only they didn’t pay our bonuses, but they also purchased several planes by using preferential government [USD] exchange rates, which are only available to those who support the regime.”

“The airline’s chief pilot had been given a large ‘incentive’ to keep all other pilots quieted” until SBA Airlines figured out how “to get out of the [economic] hole.”

And from the operational perspective, SBA’s management even “purchased the wrong engine” of a Boeing 757-200 which needed replacement.

“One of their 757s had been grounded because of engine malfunctions. A new, overhauled engine had to be bought (…) and the airline’s management purchased the wrong one,” the Pilot said.

An overhauled 757 engine can cost up to $5 million.

No Future In Sight

Today, these three airlines are practically bust, while all its pilots are looking for jobs elsewhere.

According to three SBA pilots, there have been numerous attempts from staff to steal airplane parts, computers, and office assets at the airline’s headquarters in Caracas to counteract the debt the airline holds against them.

In the meantime, Venezuela’s current aviation outlook remains as dark as the country’s political state, which has been highlighted as a dictatorship by numerous governments in the region, including the United States.

The only airlines that remain active with partial operations are Conviasa, Laser, Avior, Turpial, Venezolana, and Rutaca—just a fraction of what once used to be a busy airpark with a myriad of domestic and international carriers fighting for slots at the country’s principal airport.

As all Aserca, SBA, and PAWA pilots, crewmembers, and ground staff are left adrift, the whereabouts of Simeon Garcia remains unclear. Not a single statement has been released from the Group’s CEO and both SBA and Aserca continue to reassure that their operations are “temporarily suspended,” when, in fact, the airlines are practically out of business.

All that’s left is the cemetery of Aserca, SBA, and LTA Aerotuy planes grounded in Caracas, Miami, and Mexico City, together with the memories of what once was Venezuela’s largest airline.

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