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Don't fly for me, Venezuela
Published on August 6, 2014 Email To Friend    Print Version

aeropuerto_nacional_caracas.jpg
Simón Bolívar International Airport in Caracas, Venezuela. Photo: Carlos Colina

By Caribbean News Now contributor

CARACAS, Venezuela -- An ongoing currency feud between the government in Caracas and international airlines has now made it nearly impossible to fly to or from Venezuela. Some airlines have cut back on flights and others have simply stopped flying to the country altogether. The number of tickets currently available to and from Venezuela is just five percent of the number offered a year ago.

And passengers aren’t the only ones affected. Flights carrying freight, especially pharmaceutical supplies, are also limited and there is now a dramatic shortage of essential medications.

The shortage of airlift is just part of a larger problem for Venezuela. Over the past year, the country with the world’s greatest oil reserves has been suffering from a severe economic crisis, brought on by years of currency controls, overspending and other ill-conceived economic policies.

As part of an arcane system of multiple exchange rates and currency controls, the Venezuelan government has forced airlines to sell tickets in bolivars for years, with the promise that they will be able to send their revenues back home in dollars, using the official exchange rate. Now, however, the government will not permit the airlines to repatriate an accumulated $4.1 billion worth of airfares in dollars.

In response, the airlines decided to reduce or suspend flights, leaving passengers stranded with no possibility of transferring their tickets to other airlines.

Last month, United Airlines became the last of the three largest US carriers to cut flights to Venezuela. Service will be reduced to four round trips a week from the current daily flights, a 43 percent reduction, effective September 17, United said.

Also last month Delta Air Lines announced that the airline was reducing service by 85 percent, replacing its daily roundtrip flight between Atlanta and Caracas with one roundtrip weekend flight as of August 1.

Frustrated over the continued non-payment of some $750 million owed to it by Venezuela through March 31, American Airlines has also cut its weekly flights to the destination to ten, down from 48 previously.

Other international and regional airlines have taken similar action.

Italian airline Alitalia announced in May that it was suspending all flights to Venezuela "due to the ongoing critical currency situation” in the country, "which is "no longer economically sustainable."

The decision by Alitalia followed a similar suspension in late March of all flights to Venezuela by Air Canada and a number of regional airlines have reduced the frequency of flights. Colombia's Avianca has reduced itineraries by more than two-thirds. Other airlines represented by the International Air Transport Association (IATA) are considering suspending all flights to Venezuela.

Lufthansa recently suspended ticket sales in the country for several days and has reduced its Frankfurt-Caracas service to three weekly flights from daily.

“The airlines get to a point where they want to serve the country and they want to serve the Venezuelan people,” said IATA spokesman Jason Sinclair. “But they’re owed so much money, it just becomes not viable to operate in Venezuela.”

According to the Association of Venezuela Airlines (ALAV), out a total of 25 international airlines operating to and from Venezuela, 16 have not yet signed a payment agreement with the government, through the aeronautical authorities.

Those companies that are still waiting for an agreement are Air Canada, Air France, Alitalia, American Airlines, Avianca, Caribbean Airlines, Copa Airlines, Delta Air Lines, Federal Express, Iberia, LACSA, LAN Airlines, Lufthansa, TACA, TAP Air Portugal and United Airlines.

Most of the major international airlines flying to Venezuela have declined the government’s offers because they include significant discounts on the principal amounts and have long repayment schedules.

“The terms were very complicated, and the offers that were made to different airlines were very different,” Sinclair said. “The discounts were arbitrary. There wasn’t a calculation to them that we saw.”
 
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