VENEZUELA: American Airlines to slash Venezuela flights over trapped cash dispute

Record ID: 243851

  • Title: VENEZUELA: American Airlines to slash Venezuela flights over trapped cash dispute
  • Date: 17th June 2014
  • Summary: CARACAS, VENEZUELA (JUNE 17, 2014) (REUTERS) EXTERIOR OF AMERICAN AIRLINES OFFICE IN CARACAS WOMAN LEAVING AMERICAN AIRLINES PEOPLE WALKING (SOUNDBITE) (Spanish) LOCAL RESIDENT AFFECTED BY AMERICAN AIRLINES SUSPENSION, JORGE SUAREZ, SAYING: "It's really serious for us, the Venezuelans, because there is a lot of demand (for airline tickets). If we were unable to cope with the flights that were available, imagine what will happen if they reduce the flights. People will be even less likely to find tickets." MORE OF EXTERIOR OF AMERICAN AIRLINES OFFICE (SOUNDBITE) (Spanish) LOCAL RESIDENT AFFECTED BY AMERICAN AIRLINES SUSPENSION, CARLOS MADRID, SAYING: "Every day, fewer planes will fly into Venezuela. That's what will happen. They (American Airlines) began and more airlines will soon follow. A time will come when there will be no airlines left (in Venezuela), only government-owned ones."
  • Embargoed: 2nd July 2014 13:00
  • Keywords:
  • Location: Venezuela, Bolivarian Republic of
  • Country: Venezuela
  • Topics: Transport
  • Reuters ID: LVA71IMKCX4GANB0EENY8HCZ2GZF
  • Story Text: American Airlines said on Tuesday (June 17) it will cut almost 80 percent of its weekly flights to Venezuela in response to the government's refusal to repatriate $750 million in revenue trapped by exchange controls.
    As of July 2, American Airlines will run 10 weekly flights with service only to Miami. Its current schedule includes 48 weekly flights to San Juan, Dallas/Fort Worth and New York.
    The International Airline Transport Association (IATA) says its member airlines have $4 billion in ticket revenue that they have been unable to repatriate due to delays in the South American nation's currency control mechanism.
    The company says it has worked in Venezuela for more than 25 years, and the country was the airline's first destination in South America.
    President Nicolas Maduro has threatened to kick out airlines that halt flights or restrict service. He recently attributed the problem to flights being re-routed to Brazil for the World Cup soccer championships.
    Venezuelan residents' travel plans have been suffering recently due to lack of flight availabilty, with concern growing over how to cope when American Airlines cuts down its flights to and from the South American country.

    "It's really serious for us, the Venezuelans, because there is a lot of demand (for airline tickets). If we were unable to cope with the flights that were available, imagine what will happen if they reduce the flights. People will be even less likely to find tickets," commented local resident Jorge Suarez.
    Jorge and his friend Carlos Madrid say they have spent one month trying to find flights to Chicago, where they planned to take an English course. The men say they haven't been able to find a single airline that has space to take them to the U.S.

    "Every day, fewer planes will fly into Venezuela. That's what will happen. They (American Airlines) began and more airlines will soon follow. A time will come when there will be no airlines left (in Venezuela), only government-owned ones," added Carlos Madrid.
    Venezuela's 11-year-old currency control system requires that airlines bill tickets in the local bolivar currency. But the country has granted only limited approval to repatriate those funds back into dollars.
    Air Canada recently cut flights to Venezuela because of security concerns, while Alitalia suspended services due to delays in repatriating revenue.
    The government last month reached a deal with six small airlines that agreed to a reduced payment, and the economy vice-president said another $486 million would soon be released to the airline industry.
    Despite some advances, the airlines remain frustrated at the situation, an IATA spokesman said.
    Airlines for years priced tickets at the strongest official exchange rate, which has been devalued over the last 18 months.
    Starting in July, the government will allow airlines to repatriate revenue at a rate of around 50 bolivars per dollar, from roughly 11 bolivars currently.
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