Airlines Suspend Flights to Venezuela as Economic Crisis Worsens
Venezuela has for years seen airlines reduce capacity to the South American country as they struggled to repatriate revenue. Now, two airlines are calling it quits altogether. Latam Airlines Group SA, Latin America’s largest carrier, said Monday that it would cut all flights to Caracas by August. A day earlier, Deutsche Lufthansa AG had said it would suspend its three weekly flights to Venezuela next month “until further notice.”
The German airline’s spokesman, Andreas Bartels, pointed to the challenge of repatriating revenue from Venezuela and a sharp drop off in ticket demand -- especially among business travelers -- with the nation mired in its third year of a deep recession. Carriers have struggled for years to transfer back profits from Venezuela, leaving billions of dollars trapped in bolivars -- the local currency. Latam also highlighted economic conditions, saying it wouldn’t resume flights when things improved.
“The companies of the Latam group consider Venezuela to be a relevant market and will work to reestablish operations as soon as global conditions permit,” the company said in a statement. The company will halt flights from Sao Paulo to Caracas on May 28, with flights from Santiago, Lima and Guayaquil phased out by the end of July.
Lufthansa and Latam join American Airlines Group Inc., which announced in March it was canceling its Caracas-to-New York route just three months after reinstating it because of low demand, Venezuelan newspaper El Nacional reported.
Lufthansa hopes to restart the routes pending improved conditions in the country but is skeptical flights will return soon, Bartels said. The company is owed more than $100 million from Venezuela, Reuters reported on Monday. Venezuela’s economy is projected by the International Monetary Fund to contract by 8 percent in 2016, with the average rate of inflation expected to surge to almost 500 percent.