Skip to comments.IATA seeks meeting with Venezuela president over money owed to airlines
Posted on 07/28/2014 7:35:52 AM PDT by Oldeconomybuyer
A leading air transport industry body has called for a top-level meeting with the Venezuelan president to discuss ways to restore over $4 billion of airlines' money that is trapped in the country due to its currency controls.
President Nicolas Maduro's government requires airlines to sell tickets in the bolivar currency but has been slow to allow them to repatriate the earnings.
IATA said on Monday that international capacity on routes to Venezuela is down 36 percent year-on-year, or down 49 percent from 2013 peaks.
"Confidence in the market is falling sharply," Tyler said. "Venezuela risks becoming disconnected from the global economy."
(Excerpt) Read more at reuters.com ...
Why would any foreign airline (besides Cuba) continue to service Venezuala?
Venezuela: “We have altered the deal. Pray we do not alter it further.”
Before TU Hugo started his communist crusade, Venezuela was one of the few democracies in Latin America. The country has tremendous resources beside oil.
From a recent Dallas Morning News article:
In a note Friday to investors, analyst Bob McAdoo of Imperial Capital played down the significance of the Venezuelan problems on American.
It now appears that unit revenue on its Venezuela service had been artificially high during 2013 as a result of certain black market currency inefficiencies. McAdoo wrote. We view these Venezuela issues for AAL and other airlines as a one-time relatively minor [event] given the size of most carriers.
In announcing the cuts in their service, American, Delta and United all cited their inability to bring their money out of Venezuela.
As of June 30, Fort Worth-based American said it has $791 million stuck in Venezuela. Delta said it has $194 million held in Venezuela, and United listed $100 million.
On July 2, American slashed its U.S.-Venezuela schedule from 48 flights a week to only 10. Its weekly round trip between Dallas/Fort Worth and Caracas was among the flights canceled.
Delta currently offers a daily round trip between Atlanta and Caracas. It will drop to one flight a week beginning Aug. 1. United will reduce its Houston-Caracas flight from daily to four times a week as of Sept. 17.
Clerarly, Venezuela needs to sell more oil to the US Gulf Coast refineries.
Viva Chavez! Viva Maduro! Viva Obama!