American dramatically cuts service to Venezuela
06/17/2014 10:26 AM
06/17/2014 10:28 AM
American Airlines will drop 80 percent of its weekly flights between Venezuela and the U.S. after July 1 because the Venezuelan government owes the carrier hundreds of millions of dollars.
The Fort Worth-based carrier said Tuesday that it will continue 10 of its current 48 flights to the South American country. The remaining flights will be out of Miami to Caracas and Maracaibo but they will be less frequent.
American will end its weekly flight between Dallas/Fort Worth airport and Caracas. It will also cut flights between Caracas and San Juan and Kennedy Airport in New York.
American said it was owed $750 million as of March for tickets sold in Venezuelan bolivars that have not been exchanged for U.S. dollars. Venezuela requires airlines to bill tickets in the bolivar currency, and the government has approved only a limited amount to be repatriated back into dollars in the past 18 months.
“Since we are owed a substantial outstanding amount and have been unable to reach resolution on the debt, we will significantly reduce our flights to the country after July 1,” the airline said in a statement. “We continue to work with the government of Venezuela on this matter,” it said.
The International Air Transport Association trade group estimates that $3.9 billion in airline funds are being held in Venezuela.
Other international carriers — including Air Canada, Alitalia and Copa Airlines — have cut service to Venezuela because of the issue. The trade group estimates that in the past year 11 of the 24 carriers operating in Venezuela have reduced their operations from 15 to 78 percent.
“The situation is unacceptable,” trade group CEO Tony Tyler said this year. “Airlines are committed to serving the Venezuelan market, but they cannot sustain operations indefinitely if they can’t get paid.”
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