Plane Crash in Cuba Leaves 111 Dead and an Industry in Crisis

Tragedy hit Cuba last Friday when a plane crashed shortly after taking off from José Martí International Airport, killing 111 people on board. 50 of the dead have been identified, and an investigation into the causes of the crash is ongoing. There are only two survivors, both in critical condition.

The crashed plane was leased to Cubana de Aviacíon, the country’s national air carrier, by Damojh. Damojh, a small charter airline based in Mexico that had a fleet of three aircraft before the accident. Their license to operate was suspended in 2010 and 2013 because of problems with their planes. Additionally, the exact plane that crashed was banned last year from Guyanese airspace because the crew had dangerously overloaded luggage on a flight to Cuba.

Richard Aboulafia, vice president of aviation consultants the Teal Group, was surprised such an old plane—a 39-year-old Boeing 737—was still in use. “That’s one of the oldest passenger jets I have heard of that is still in service,” he commented.

The tragedy is a symbol of the difficulties faced by Cuba’s aviation industry and economy. As international tourism has increased, Cubana has found itself unable to meet demand. Its fleet is both too small and antiquated for its current needs.

The situation grew so extreme that, on May 17, the government grounded a majority of Cubana’s domestic flights, citing safety concerns. In order to resume flights, Cubana leased planes from foreign companies, but those planes were often several decades old. This was the case with the 737 leased from Damojh.

Experts disagree on the causes of the problems plaguing the Cuban aviation industry. However, they agree that poor economic management by the Cuban government coupled with the effects of the U.S. embargo are central issues.

“If it were not for the embargo, they would be able to access a robust capital market for financing Western aircraft,” explained Samuel Engel, airline industry expert and vice president of ICF Consulting. Without access to financing and new vendors, Cubana is dependent on maintaining an increasingly old fleet. This fleet includes aircraft designed in the Soviet Union, which are increasingly hard to find parts for.

Other analysts, such as Dallas Woodrum of Akin Grump, disagree the embargo is the defining factor in Cuba’s aviation crisis. “The embargo does play a role in inhibiting business with Cuba, but there are policies to promote the sale of aircraft. … Whether businesses decide to take advantage of that is a different question and a matter of their risk tolerance,” said Woodrum.

The increasingly weak state of the Cuban economy coupled with the Communist Party’s reluctance to embrace reforms compound the problems and deter foreign investors. Emilio Morales of the Havana Consulting Group explains: “The challenge is that they don’t manage the industry well. The business requires capital.”

With money growing scare and the government facing an annual shortfall of $2.5 billion, the situation is unlikely to improve soon. “Whether the airline is going to survive is an open question,” said George Farinas who is currently writing a book on the history of Cubana. “They are in a major crisis right now.”

Sources

5-19-2018 Hand-Me-Down Plane That Crashed Reflects a Cuban Air Industry in Crisis

05-22-2018 Cuba plane crash: Grettel Landrove becomes 111th victim

Image of Damojh Beoing 737 by Aramidea.