Published On: Fri, May 2nd, 2014

IATA: ‘Venezuela failing to keep promises on airlines revenues’

IATACARACAS, WILLEMSTAD -  Venezuela should urgently release $3.9 billion owed to airlines over ticket sales, the International Air Transport Association (IATA) said on Tuesday, saying the government was not keeping promises to offer fair exchange rates.

The South American nation requires airlines to bill tickets in its Bolivar currency and for close to two years the state currency board has denied airline requests to convert ticket sales revenues into hard currency and repatriate the funds.

The Venezuela government said at the end of March that it would allow foreign airlines to repatriate the money, using the exchange rate in place at the time the fares were sold.

"Since then there has been very little progress," IATA Chief Executive Tony Tyler said in a statement. "The situation is unacceptable."

IATA said that the Venezuelan government had made offers to release some of the airlines' funds, but at lower exchange rates or at a discount, offers that were rejected by the airlines.

"Airlines are committed to serving the Venezuelan market, but they cannot sustain operations indefinitely if they can't get paid," Tyler said.

Airlines such as Germany's Lufthansa have reduced services to the country, while Air Canada, has stopped services altogether, citing security concerns related to street protests. The local airline, Insel Air is still operating to and from the South American market and believes that it will reach an agreement with the Venezuelan foreign exchange regulator. Venezuela owes Insel Air about 80 million dollars.

IATA said the currency controls affected 24 airlines, 11 of which had reduced operations by between 15 and 78 percent over the last year.

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