Published On: Wed, Apr 9th, 2014

Venezuela modifying its payment agreement to international airlines

Hebert-Josue-Garcia-Plaza-AVN_NACIMA20130913_0257_6CARACAS, WILLEMSTAD – International airlines operating to and from the South American country, Venezuela will get a major hit now that they will not receive what they have deposited in the country’s foreign exchange regulator, CADIVI. The reason for this is the devaluation of the national currency, the Bolivar.

The Minister of Aerial and Nautical Transportation, Herbert Garcia Plaza, announced two weeks ago that the Venezuelan government does recognize the total debt it has with the international airlines. The announcement entailed that the 3.8 billion dollars will be paid using the currency exchange rate, which was valid when the airlines deposited their Bolivars in CADIVI. The rate was 4.30 for one dollar till February 2013; 6.30 Bolivars for a dollar till February 2014 and now 10 Bolivars for a dollar.

The airlines are still waiting for a payment plan. The authorities of the Ministry of Aerial and Nautical Transportation together with the National Institution for the Civil Aviation (INAC) have started meeting with the airlines. The final result of these negotiations will not be favorable for the airlines. The State announced that it will reduce the debt accumulated in 2013 by between 29 to 35%. The argument used is that the airlines have caused a shortage of seats and flights when they increased their tariffs, which was out of proportion.

This means that the Venezuelan government has reduced its debt, which was 3.8 billion dollars, by more than 50%.

 

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