Last Sunday I reviewed some aspects of the “Sustainable Nation” forum that was hosted by Caroni Central MP Dr Bhoendradatt Tewarie at the Arthur Lok Jack Graduate School of Business on August 9...
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CAL among airlines owed US$3.8b by Venezuela
Caribbean Airlines (CAL) is one of several airlines waiting to sign agreements with Venezuelan authorities for payment of some US$3.8 billion owed to them from ticket sales in that financially-troubled South American country. The other airlines are Air Canada, Air France, Alitalia, American Airlines, Avianca, Copa Airlines, Delta Air Lines, Federal Express, Iberia, LACSA, LAN Airlines, Lufthansa, TACA, TAP Air Portugal and United Airlines.
In recent months an ongoing currency feud between the government in Caracas and international airlines has made it nearly impossible to fly to or from Venezuela. Some airlines have cut back on flights and others have stopped flying to the country altogether. The number of tickets currently available to and from Venezuela is just five per cent of the number offered a year ago.
The situation is the result of the country’s system of multiple exchange rates and currency controls, which has forced airlines to sell tickets in bolivars with the promise that they will be able to send their revenues back home in dollars, using the official exchange rate. In recent months the government has not allowed the airlines to repatriate the money owed them for airfares in foreign currency.
While the situation has caused several carriers to reduce or suspend flights to Venezuela, a CAL official told the T&T Guardian the state-owned airline continues to operate on the route. CAL currently operates flights to Caracas on Thursdays, Fridays, Saturdays, Sundays and Mondays. “I have been advised to let you know that at this time, Caribbean Airline’s service to/from Caracas remains intact,” the official said, then referred this newspaper to a statement by the International Air Transport Association (IATA) on the matter.
IATA recently launched a communications plan with the goal of coaxing the Nicolas Maduro administration into releasing all of the airlines’ money. So far the response from the Venezuelan government has been to call the affected airlines to a meeting to make verbal commitments to release the blocked money. IATA said it is confident the strategy has been effective so far and plans to “continue to draw attention to the plight of the airlines in Venezuela until an appropriate solution is reached.”
Last month, United Airlines became the latest US carrier to cut flights to Venezuela. Service will be reduced to four round trips a week from the current daily flights—a 43 per cent reduction—from September 17. From August 1, Delta Air Lines reduced its service by 85 per cent, replacing its daily roundtrip flight between Atlanta and Caracas with one roundtrip weekend flight. American Airlines cut its weekly flights to the destination to ten, down from 48 previously.
Other international airlines that have taken similar action include Italian airline Alitalia which 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. Colombia’s Avianca has reduced flights by more than two-thirds and other airlines represented by the IATA are considering suspending all flights to that country.
Lufthansa has reduced its Frankfurt-Caracas service to three weekly flights from daily.