United Airlines suspends flights to Venezuela

Venezuela has fallen out of favor with many airlines, over its hoarding of nearly $3.8 billion in ticket revenues since 2013.
By Lucas Rowe | Jun 04, 2017
United Airlines will put a moratorium on flights to Venezuela, starting July 1. Charles Hobart, a United spokesman, said in an email that the airlines made this decision because Houston-Caracas route "is not meeting our financial expectations."

Venezuela has fallen out of favor with many airlines, over its hoarding of nearly $3.8 billion in ticket revenues since 2013. These sales stemmed from buyers within Venezuela who had bought tickets using bolivars, the local currency, and the government must repatriate these revenues to the airlines' accounts in their countries' currencies before the airlines can access them. In the face of economic retraction, hyperinflation, and national foreign-currency reserves dwindling to less than $12 billion, the government stalled on repatriating any of these funds and forced the airlines to write the debts off as losses.

Several other airlines have cut or halted airline flights to Venezuela in light of the situation. American Airlines, which lost $592 million to Venezuela's repatriation troubles, has flown dramatically fewer Venezuela flights since 2014.

Chile-based Lataim Airlines suspended flights from Brazil, Chile, and Peru to Caracas last year. It was joined by German airline Lufthansa, which stopped flying planes from Frankfurt to Caracas; and Mexican airline Grupo Aeromexico, which ended its Venezuela-Mexico City route.

Air Canada also ended flights to and from Caracas in 2014, but its primary reason for doing so was civil unrest. Venezuela suffers from more violent crime than any country in the Western hemisphere, in addition to rising tides of violence between mass protests and national security forces who resort to tear gas and bullets to suppress them.

 

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