Airlines Suspend Ticket Sales In Venezuela, Citing Government Debts

At least eight international airlines have suspended ticket sales in Venezuela as of Friday over what they describe as a $3.3 billion debt owed to them by the government. After Spain's Air Europa suspended ticket sales earlier this month, Tame, an Ecuadorian airline, announced on Thursday they were suspending flights entirely until they were paid $43 million for ticket sales. Air Canada and TAP Portugal soon followed. On Friday, the Associated Press reported that those four had been joined by American Airlines, Delta, United and Panama’s Copa, which either closed or halted ticket sales in bolivars.

The dispute comes shortly after Venezuela revamped foreign currency controls, setting the bolivar-dollar exchange rate for ticket sale revenues nearly two times higher than the official rate of 6.3-1 in an attempt to combat a growing black market, where dollars can be obtained at over 10 times the official rate. With the Venezuelan government strapped for cash – which the Los Angeles Times notes are largely due to falling oil revenues, which make up more than 90 percent of government revenues and 70 percent of export sales – the airlines are seeking to recuperate cash they say is “trapped” in Venezuela, where the government acts as intermediary on sales of foreign goods and services transacted in the country.

Time magazine reports that Rafael Ramírez, head of Venezuela’s state oil company, announced this week that airlines would begin to receive money owed to them from transactions at the new exchange rate, which won’t have an impact on the $3.3 billion debt. USA Today notes that before the exchange rate was altered, a practice had emerged in which Venezuelans would fly abroad – where they could exchange up to $3,000 worth of bolivars – and bring back much of those dollars to Venezuela to be sold at much higher rates on the black market.