The Airline Standoff in Venezuela is Getting Worse as the Country’s Crisis Deepens
CANCUN, Mexico — Venezuela is withholding billions of dollars from global airlines as a deepening crisis distracts from talks, an industry representative said on Sunday, a day after United Airlines announced the end of daily service to the country.
Peter Cerda, vice president of the International Air Transport Association (IATA), said Venezuela owes airlines “more than $3.8 billion” after years of failing to reimburse companies in hard currency for ticket sales in local currency. Last year IATA said airlines were owed $3.78 billion.
“I still think it will probably get worse before it gets better,” Cerda told journalists on the sidelines of IATA’s general meeting. “The government’s main priority is not aviation … We know what’s happening in Venezuela with the uncertainty and violent demonstrations.”
Unrest prompted by a crackdown on the political opposition and food shortages has resulted in the deaths of at least 65 people since April. On Saturday, United said it was halting its route between Caracas and Houston, citing weak demand rather than the ongoing currency dispute.
Airlines from Lufthansa to Air Canada have pulled out of Venezuela in recent years, citing everything from the payment dispute to safety concerns.
Government representatives did not immediately respond to a request for comment
“The industry is trying to be sympathetic. The airlines don’t want to pull out of Venezuela, but we are getting to a point where airlines need to take business decisions,” Cerda said.