Woes deepen at Cuba's flagship airline

           

Sarah Marsh and Nelson Acosta, Reuters

 

HAVANA (Reuters) - In the busy summer travel period in Cuba, a long line of people wait for hours in the sweltering heat outside the Havana office of state-owned airline Cubana, many of them eager to visit families in the provinces.

 

But they are not waiting to book flights. Instead, they hope to get their money back on plane tickets or exchange them for bus tickets across the island.

 

Cubana, which has a virtual monopoly on domestic flights in Cuba, said last month it was suspending nearly all of them due to a lack of working aircraft, plunging travel on the Caribbean's largest island into chaos.

 

Once at the vanguard of Latin American aviation, Cubana said in a statement in June it no longer had enough aircraft largely because of maintenance issues and lack of parts. It apologized to Cubans for the situation and said it was working to resolve it.

 

Cubana made the announcement a month after one of its flights crashed after takeoff from Havana airport in May, killing 112 people. Authorities in Cuba, Mexico and the United States are investigating the crash of the Boeing 737, leased from a Mexican company, Damojh, and have not commented on possible causes.

 

They did not respond to a request for comment from Reuters on the status of the investigation. Neither Cubana nor Damojh replied to multiple requests for comment for this story.

 

The reduction in Cubana's services came just as Communist-run Cuba is trying to stimulate tourism, one of the few bright spots in its economy, by promoting beach resorts and colonial towns hundreds of kilometers (miles) from the capital.

 

"Now I will have to take a 16-hour bus-ride to Guantanamo but what other options do I have?," said kindergarten teacher Marlene Mendoza, who was bathed in sweat and got a bus ticket to eastern Cuba after queuing for more than seven hours.

 

Several other Cubans interviewed by Reuters said that the crash outside Havana would make them think twice about air travel.

 

Just four of Cubana's fleet of 16 planes are flying, according to a Reuters examination of data on Flightradar24 and Planespotters.net, which track airline fleets and flights. Cubana does not publish data on its fleet and declined to comment on these findings.

 

Two former Cubana employees and several industry analysts say the airline's troubles stem largely from dual ills that afflict many parts of Cuba's state-run economy: the U.S. trade embargo and a problematic business model. The airline offers subsidized tickets to Cubans and provides services for the government.

 

Founded in 1929 as one of Latin America's first airlines, Cubana was nationalized after Fidel Castro's leftist 1959 revolution. In its heyday, it flew Cuban troops to Africa and passengers to allied socialist countries around the globe.

 

For decades it got around U.S. sanctions that restricted it from buying planes with a certain share of U.S. components - including European Airbus <AIR.PA> and Brazilian Embraers <EMBR3.SA> - by acquiring first Soviet and then Russian and Ukrainian aircraft, three lawyers familiar with the sanctions said.

 

Cubana passed the latest audit of the International Air Transport Association (IATA) - its safety certificate is up for renewal next month - but its reputation for mediocre service and delays has prompted many foreign tourists to use mostly land transport, travel agencies, Havana-based diplomats and tourists say.

 

Over the past year it started canceling more flights than usual, often putting passengers up in hotels for days, without commenting publicly on the disarray.

 

After the Boeing 737 crashed on May 18, Cubana said it had leased the plane from Mexico's Damojh due to a lack of its own aircraft. A second Damojh plane leased to Cubana has been grounded since the crash, data from Flightradar24 shows, pending a safety audit of the lessor's fleet by Mexican authorities, aggravating Cuba's shortage of aircraft.

 

Damojh - which was banned from flying in Guyana last year because of safety concerns - has said in a press release that is fully cooperating with the investigations into the "lamentable accident." Most aircraft accidents take months to investigate.

 

NOT FLYING HIGH

 

Last month, Cubana announced it was axing several routes mainly used by Cubans and reducing the frequency of flights to Santiago, Holguin and Baracoa, all popular tourist destinations.

 

Cubana also suspended all international routes except to Buenos Aires and Madrid, several staff told Reuters.

 

The company did not comment publicly, leaving would-be travelers sharing their confusion on online forums. Cubana did not respond to a Reuters request for comment.

 

"It has lost a lot of prestige. It's already not the famous Cubana that used to fly to all parts of the world," said one former employee, who retired 6-1/2 years ago after working for Cubana for 40 years and who requested anonymity.

 

Cubana sells tickets to Cuban citizens at heavily subsidized prices. Its budget is also stretched by ferrying official delegations around sometimes at a financial loss, a former Cuban diplomat familiar with Cubana operations said.

 

Cash-strapped Cuba points the finger at the 56-year-old U.S. trade embargo, saying in an annual foreign ministry report last year on the impact of what it calls a "blockade" that it has cost the country's flagship carrier millions of dollars.

 

PROBLEMS WITH SUPPLIERS

 

Cubana has in the past told state-run media that the embargo deters suppliers from dealing with it and said some companies had canceled contracts with the airline when concerns had arisen. As such, it has to pay a premium for fuel, leasing and parts, it has said.

 

Since 2013, Cubana has purchased six An-158 regional jets from Ukrainian manufacturer Antonov, which is not affected by the U.S. embargo.

 

However, a Cubana worker explained in provincial state-run newspaper Ahora last year those planes were experiencing technical problems and getting parts for the joint Russian-Ukrainian project had proven difficult since Russia's annexation of Crimea in 2014.

 

An Antonov representative told Reuters that Cubana had advised the company it had grounded its fleet of An-158 jets because of the need to carry out work on the engines. The representative said Cubana was not "financing the purchase of parts or the implementation of necessary work".

 

However, the representative said Antonov had signed a deal in April with the airline to cooperate "to resume the use of An-158 planes before the end of the current year".

 

Typically, airlines lease planes when theirs are undergoing maintenance or there is a spike in demand.

 

But in May, Lithuanian lessor Avion Express and Italian lessor Blue Panorama both ended their contracts with Cubana, the companies told Reuters, without explaining why.

 

Data from Flightradar24 shows they withdrew respectively four Airbus A320s and one Boeing 737.

 

Cubana turned to little-known Damojh, leasing the 39-year-old Boeing 737, less than a month before the crash on May 18, Cuban Transport Minister Adel Yzquierdo told reporters the day after the accident. Cuban authorities did not respond to several requests for comment on the decision to contract Damojh.

 

 

(Reporting by Sarah Marsh and Nelson Acosta in Havana; Additional reporting by Allison Lampert in Montreal, Alessandra Prentice in Kiev, Dave Sherwood in Santiago de Chile, Victoria Bryan in Berlin and Andrius Sytas in Vilnius; Editing by Daniel Flynn and Frances Kerry)

 

 

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