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Foreign airlines suspend local currency ticket sales in Venezuela
Published on January 27, 2014 Email To Friend    Print Version

By Caribbean News Now contributor

CARACAS, Venezuela -- On Friday three more international airlines joined the list of foreign carriers that have suspended local currency ticket sales in Venezuela, saying that the government owes them billions of dollars in unpaid fares.

US carriers American Airlines and United Airlines, along with Panama’s Copa Airlines, said they were halting ticket sales in Venezuela as a result of the government’s failure to pay arrears that as of last month totaled $2.6 billion, according to a statement issued on December 12 by the International Air Transport Association, an airline trade group.

Under Venezuela’s complicated foreign exchange rules, the government acts as intermediary in foreign currency sales of goods and services, including air fares.

Airlines that have already suspended operations include Air Canada, Tame (Ecuador) and TAP (Portugal).

As of Friday, no flights in or out of Venezuela had been cancelled by foreign carriers, but the airlines had halted ticket transactions in bolivars. Sales of tickets purchased with dollars are still reportedly being made.

Venezuela finds itself in a tightening shortage of foreign currency partly because of falling oil revenues. An increasing percentage of oil output now goes directly to China to repay cash advances that now exceed $42 billion. Free or discounted oil that Venezuela ships to Cuba and several other Caribbean nations under the PetroCaribe agreement generates less than market rate.

Last month, airlines in the Dutch Antilles were reported to be facing acute financial problems over the Venezuelan payments default.

Tiara Air Aruba was in an especially difficult position. Curacao based InselAir is still surviving, though its partner KLM was also waiting on $70 million from Caracas.
 
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