American cuts flights to Venezuela

Written By Unknown on Rabu, 18 Juni 2014 | 20.24

18 June 2014 Last updated at 00:08

American Airlines says it is cutting almost 80% of its flights to Venezuela from next month.

From July 2, American will operate only 10 flights per week instead of the current 48.

The move comes as part of a continuing dispute over the repatriation of revenue due to tight currency controls in the oil-rich country.

A number of airlines have already suspended or reduced the number of flights to Venezuela.

"Since we are owed a substantial outstanding amount ($750m, £442m to March 2014) and have been unable to reach resolution on the debt, we will significantly reduce our flights to the country after 1 July," the airline said in a statement.

American said it would only fly to Venezuela from Miami, suspending its flights from New York, Dallas and Puerto Rico.

Tight foreign currency controls make it difficult for foreign airlines to repatriate money from ticket sales in Venezuela.

The authorities have restricted access to dollars and want to make them more expensive to purchase, which may lead to losses for companies that are still waiting for cash from as far back as 2012.

The International Air Transport Association (Iata) estimates Venezuela is delaying payment of $4bn.

American Airlines is the largest foreign carrier serving Venezuela.

Air Canada has suspended service citing security concerns, while others like Lufthansa and Copa Airlines have reduced the number of tickets made available in local currency.

In January, Ecuadorean airline Tame also suspended flights to Venezuela, demanding $43m (£26m) in overdue payments for tickets.

President Nicolas Maduro said at the time that airlines that reduced their operations in Venezuela would face "severe measures".

"The company that leaves the country will not return while we hold power," said Mr Maduro.

Last month, the Venezuelan government announced a deal with six Latin American airlines that would allow them to repatriate revenue from sales in 2012 and 2013.

Strict controls over foreign exchange were first imposed in 2003, following a troubled year which saw a coup against then-President Hugo Chavez.

The government hoped to avoid capital flight, but the economic crisis of the past year has led to a shortage of foreign currency.


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