The US Department of Transportation (DOT) has rejected an application by Transcarga International Airways (T7, Caracas Simón Bolivar) for authority to conduct certain extra-bilateral all-cargo charter flights between Venezuela and points in the United States.

The Venezuelan freight specialist submitted the application in June last year requesting additional authority to ply various charters from Venezuela to each of Aguadilla/San Juan Luis Muñoz Marin in Puerto Rico, Houston, Miami and New York (New York JFK, New York Newark, and Newburgh) in the United States over the period August 1, 2016, through to January 31, 2017.

The bid, however, garnered objections from US cargo carriers Centurion Air Cargo (and sister firm SkyLease Cargo (GG, Miami Int'l)) and Amerijet International. They alleged that the requested authority should not be granted given the Venezuelan government's policies which, they said, discriminated against US airlines while favouring those from Venezuela.

Transcarga later responded to the US firms' objections, stating among other things that their complaints were misleading, frivolous, and should be disregarded by the DOT.

The DOT then carried out an investigation into the US complainants' objections to determine whether adequate reciprocity existed in the Venezuela-US all-cargo charter market as required under the terms of the two countries' bilateral air services agreement.

When the Venezuelan civil aviation authority (Instituto Nacional de Aeronáutica Civil - INAC) did not respond ahead of an October 30, 2016, deadline, the DOT ruled a day later that, as it did not have adequate information to determine whether reciprocity existed, it would, therefore, only award Transcarga authority for the two-week period November 1-14, 2016 solely so that it could use that time to wind down its US charter operations.

Transcarga subsequently appealed the decision bolstered by INAC's late response to the DOT's inquiries. Aside from claims that the non-issuance of the requisite authorities would impact its US workforce as well as various cargo markets, Transcarga also argued that US cargo carriers being allowed to continue to operate unlimited flights between the United States and Venezuela, including 5th and even 7th freedom operations, was ample evidence of reciprocity.

However, the DOT, in a ruling issued on January 6, 2017, rejected Transcarga's and INAC's evidence as insufficient.

"Based upon our review of the record that has been developed in response to Transcarga’s request for reconsideration of our October 31 decision, including our review of the correspondence provided by the Venezuelan INAC, we do not find a persuasive basis to reverse our earlier result," it said.

"In the circumstances presented we thus remain unable to make a finding that adequate reciprocity for treatment of charter services exists with Venezuela in order to support an affirmative public interest determination necessary to grant Transcarga’s request for reconsideration."

The DOT said while Transcarga was welcome to submit further applications for route authorities in future, it would still have to provide evidence that there is adequate reciprocity in the market.

In an emailed response, Transcarga CEO Julio Marquez told ch-aviation he believed the three US firm's objections were not based on regulatory concerns, but rather on commercial and competitive considerations.

"The commercial objectives that prompted these objections overcame any logical reasoning and the DOT, without looking beyond these unfounded arguments, made a decision that created a monopoly on the US-Venezuela routes in favor of the US carriers. There are currently nine (9) US carriers covering these routes as opposed to only one Venezuelan carrier competing against them, up until November 14, 2016 (Transcarga). The Venezuelan government grants more than one hundred (100) monthly flight permits to these US carriers whilst at the present time US authorities are not allowing the only Venezuelan carrier even a single flight to the US," he said.

"The most interesting and surprising part of this situation is how these US carriers chose to undermine the INAC’s reputation by making allegations of discriminatory treatment and lack of reciprocity while, in the meantime, they have never stopped enjoying the benefits of operating freely in the US/Venezuelan market."