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  HOME | Venezuela (Click here for more Venezuela news)

Airlines Want Venezuela to Release $3.9 Billion

MIAMI – Venezuela’s government should allow “the repatriation of $3.9 billion of airline funds at fair exchange rates,” the International Air Transport Association (IATA) said on Tuesday.

The Venezuelan government’s decision to retain funds from the sale of airline tickets is “in contravention of international treaties,” the IATA said in a statement.

Preventing carriers from accessing their funds “puts at risk a major contributor to the well-being of the Venezuelan economy – sustainable air connectivity,” the IATA said.

President Nicolas Maduro said last month that any airline deciding to leave Venezuela wound not be allowed to return as long as he was in office.

Maduro also said carriers that reduced their flights would face “severe measures.”

“The situation is unacceptable. In March, the Venezuelan government promised airlines that it would release their money for repatriation at fair exchange rates. Since then, there has been very little progress,” IATA director general and CEO Tony Tyler said.

The carriers “are committed to serving the Venezuelan market, but they cannot sustain operations indefinitely if they can’t get paid,” Tyler said.

“Urgent government action is needed. IATA stands ready to help, but we cannot move forward without the government’s commitment to make good on its promises,” Tyler said.

The IATA said it was seeking “the immediate release of the blocked funds for repatriation at the exchange rates in place at the time the funds were generated. In most cases this was 6.3 bolivars to the U.S. dollar.”

The Venezuelan government, according to the airlines, has made several offers this month to release some of the funds, “but at inferior exchange rates or with arbitrary discounts,” the IATA said.

The offers “contradicted prior commitments to enable the airlines to repatriate the full amount they are owed and were rejected by the airlines,” the IATA said.

The currency controls imposed by the Venezuelan government have affected 24 carriers, with the total funds blocked standing at $3.5 billion at the end of 2013, the IATA said, adding that the airlines estimate that the blocked funds now total $3.9 billion.

Airport charges were increased by 70 percent in December 2013 without any “consultation or improvement in services provided,” the IATA said.

The special taxes “levied on the air transport sector” are being used “to fund activities completely unrelated to air transport,” the IATA said.

Eleven of the 24 companies operating in Venezuela have reduced their operations between 15 percent and 78 percent, “while one has stopped flying to the country altogether,” the IATA said, referring to Air Canada.

“Preserving and protecting Venezuela’s connectivity should be a priority for the Venezuelan government. Connectivity to Venezuela is deteriorating,” the IATA said.

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