Published on : Thursday, June 2, 2016
Latam, (Lan Chile and Braizl’s TAM), the largest airline in Latin America, announced suspension of flights to Venezuela due to the worsening economic situation.
Oil-rich Venezuela has been hit hard by the global drop in oil prices and suffers from high inflation and a chronic shortage of basic goods.
In a statement, Latam airlines said it would suspend its operations to Caracas airport “temporarily and for an unspecified time”.
The suspension came a day after Germany’s Lufthansa said it would suspend its services to the country.
The German company said Venezuela owed it millions in ticket revenues. Alitalia and Air Canada have adopted similar suspensions, since it is estimated the Venezuelan government owes airlines almost US$3.6 billion.
Several airline companies have said that currency controls in Venezuela made it impossible for airlines to convert their earnings into dollars and send the money abroad.
Strict currency controls were first imposed in Venezuela in 2003 by late President Hugo Chavez.
Some airlines are now requiring passengers to pay their fares in dollars. While the official rate ranges between 10 and 30 Bolivar to the US dollar, in the black market it is traded at 1.000 Bolivar.
Venezuela’s government says it is using its foreign reserves – which are now scarce – to pay for essential items such as medicines and industrial machinery.
Tags: Latam Airline
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