Business
3:01 am
Thu July 10, 2014

Owed Billions By Venezuela, Airlines Cut Back On Flights There

Originally published on Thu July 17, 2014 9:16 am

Transcript

RENEE MONTAGNE, HOST:

Booking a flight to Venezuela has become nearly impossible. Many airlines have recently cut back on service to a country rich in oil but troubled economically. Tim Padgett of member station WLRN in Miami explains.

TIM PADGETT, BYLINE: Until this month, American Airlines offered 48 flights a week from the U.S. to Venezuela. It's now slashed that to 10 per week. All those flights will depart from just one city, Miami, - home to the U.S.'s largest Venezuelan community. A dozen other carriers, including Delta and Lufthansa also cut flights. The reason - Venezuela's government is running out of dollars. So it's balking at paying the airlines the hard currency it owes them for ticket sales. And it owes more than $4 billion.

JASON SINCLAIR: It's completely unprecedented.

PADGETT: Jason Sinclair is with the International Air Transport Association.

SINCLAIR: We've never seen a country that has held funds that belong to an airline. And, basically, what they try to do is negotiate with the airlines a lower amount of money to be paid over a number of years, which is something that, for the most part, the airlines rejected.

PADGETT: Venezuelan president, Nicolas Maduro, insists that dealing with the country's economic crisis matters more than paying the airlines. But international flights are critical to business ties. Analysts like Sinclair warn that fewer flights may worsen the country's financial woes.

SINCLAIR: We're very concerned about what would happen to Venezuela if air connectivity was eroded further in the country.

PADGETT: Air Canada and Alitalia have ended flights to Venezuela, all together. For NPR News, I'm Tim Padgett. Transcript provided by NPR, Copyright NPR.