Managua Airport Sees Record Profits from Smuggling Migrants to USA

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By LatAm Reports Editor

The National and International Airport Manager (EAAI) reports an increase of 386 percent in its profits in 2023, after years of financial crisis

After almost two decades overcoming its financial crisis through loans and increased rates for its services, the National and International Airport Management Company (EAAI) found in the thousands of migrants who pursue the so-called American dream the perfect mechanism to put end to its financial crisis. In 2022, for the first time in decades, the balance sheet of the EAAI that manages the Augusto C. Sandino International Airport reported profits of $150 million. These increased by 386 percent in 2023, when the Ortega regime decided to deepen its strategy of facilitating the arrival of migrants from all over the world to the United States border.

The financial balance corresponding to last year shows that the National and International Airport Management Company (EAAI) ended the period with profits of 730 million córdobas (about 20 million dollars), so in the two years of use of the airport Managua as a springboard to reach the United States left public finances with 880 million córdobas (about 24 million dollars).

Daniel Ortega’s regime began to weave its immigration strategy against the United States in 2021, when in November of that year it suspended the visa requirement for Cubans. The second step was adopted in February 2022 when he ratified the decision taken in December 2016 to include his son Laureano Ortega Murillo, his front man José Mojica Mejía and his father-in-law and Chief of Police, Commissioner Francisco Díaz Madriz, in the Advisory Council of the EAAI, thereby guaranteeing control of decision-making.

Ortega took advantage of the migration crisis

Then the Venezuelan airline Conviasa began to offer flights between Havana and Managua and thus consolidated that the Managua international airport functioned as an air bridge that shortens the route to the United States border.

On the political side, the strategy helped to worsen the migration crisis facing the United States and on the economic side, it helped to clean up the finances of the EAAI, which for almost two decades had suffered annual losses. However, in November of last year the United States announced that it would restrict the visas of people involved in charter flights that bring migrants to Managua. This stopped the arrival of flights from most Caribbean islands, however, those carried out by the Venezuelan airlines Conviasa and Aruba continue to offer the service.

But the reduction in flights from the Caribbean islands increased those on other routes. The arrival of aircraft that had never set foot on the runway of the Managua International Airport became more evident. For the first time, direct flights from Germany, France and Morocco arrived in the country, loaded with African and Asian migrants. Some even faced problems covering the route, one of them was detained in France on suspicion of human trafficking and another was canceled in the United Arab Emirates.

More than 600 thousand went by land

Despite these obstacles, between 2022 and much of 2023, the Augusto C. Sandino International Airport in Managua served as an air bridge for more than 600,000 migrants to shorten the route to the United States. The small air terminal that traditionally received about 15 flights per day, reported up to fifty per day and the number of travelers who arrived by plane, but who did not use that route to leave the country, reached historic levels.

Between 2022 and November of last year, 1.43 million travelers arrived in Managua by air, but 601,800 did not go that route and it is presumed that they continued their journey to the United States by land. In 2022, 634,800 passengers entered the country through the air terminal, but only 312,400 left by this means, so it is presumed that 322,400 continued their journey to the United States by land. Last year, between January and November, 791,100 people entered through the Managua airport, but only 517,700 left by plane, so 273,400 would have gone by land to the north, to reach the United States.

In September and October 2023, the air terminal set a record for arrivals with 115,500 and 126,200 respectively. In those months, 66,500 and 80,700, respectively, of the arriving passengers did not fly back to their countries. That is, in those two months alone, 147,200 people would have joined those who continue the journey to the US border by land.

The EAAI made rate adjustments

This flow of migrants considerably increased the income of the National and International Airport Management Company (EAAI), an entity that manages six airports, five national ones located in Puerto Cabezas, Bluefields, Corn Islands, Ometepe Island and San Juan de Nicaragua, and the International of Managua, which is also the one that generates practically all of the income it receives.

Most of its income is obtained through aeronautical services, which represent 90 percent of the total and include: terminal fee, landing fee, ground handling and airport security fee. The remaining 10 percent arises from non-aeronautical services, which include charges for leases and services, own businesses (VIP lounge) and vehicle parking.

The EAAI, like the Nicaraguan Social Security Institute (INSS), were always a headache for the Ortega regime. According to the EAAI financial statements reviewed by LA PRENSA, between 2009 and 2021 it recorded annual losses of between 61 and 367 million córdobas. To try to stop this crisis, in 2012 it raised its rates and in 2016 it made another adjustment that raised the terminal use fee that each passenger pays for the plane ticket they use to $44.23. Despite these changes, in 2021 the EAAI accumulated 367 million córdobas in losses.

In 2022 CSR advised to reduce expenses

In April 2022, the company reactivated approach fees, which had not been charged since 1999, since the service was provided free of charge to all ships that landed and took off from the air terminal. Since then, runway approach radio aids are charged depending on the weight of the aircraft. It also established rates for the use of portable radiocommunicators, which are used by air operators in the landing and takeoff activities of ships.

In 2022, the Central American Risk Rating Society (SCR) recommended establishing a savings plan to reduce expenses; seek payment agreements with the Nicaraguan Social Security Institute, the electricity distributor Dissur and the General Directorate of Revenue (DGI); suspend payment of institutional agreements and purchasing processes; renegotiate credit terms and adjust service rates.

However, it was not necessary to apply the SCR recommendations, since that year the migrant business began to operate and the EAAI closed 2022 with 963 million córdobas in income, almost double compared to 2021 and a figure similar to that of the years prior to the outbreak of the sociopolitical crisis in 2018. That amount exceeded expenses and for the first time in almost two decades the EAAI obtained profits, a total of 150 million dollars.

EAAI risk rating improved

In 2023, the air bridge was consolidated, it was no longer used only by Cubans and Haitians, but the service was extended to Africans and Asians and that raised revenues to 1,430 million córdobas, a record figure that left it with profits of 730 million. of córdobas (close to 20 million dollars at the official exchange rate), which is also the largest profit that the company has recorded in its history. This amount represents a profit growth of 386 percent compared to 2022.

Thanks to this performance, in December 2023, the Central American Risk Rating Society (SCR) praised the “consistency shown by the EAAI in achieving the different plans established to improve its financial situation.” Thanks to the increase in passenger flow, it was able to pay off its debts without needing to receive state support, which is why it gave it a positive and growing EBITDA.

EBITDA (Earnings Before Interest Taxes Depreciation and Amortization) is a financial indicator that shows the profit of companies before subtracting the interest they have to pay on debts, taxes and depreciation due to impairment.

Among the opportunities, the SCR report indicates that the flow of passengers can continue to be promoted through the reactivation of tourism, so that the airport operation continues to generate a level of income that generates profits.

Regarding the challenges, he considers that the entity must reduce the high level of debt; reverse the accumulation of losses that generate a constant erosion of the EAAI’s financial position; and reach a break-even point in the other air terminals, which to date represent an expense for the EAAI.

This article has been translated from the original which first appeared in La Prensa NI