US Markets

Airlines see new government in Venezuela as key to repayment of debt -IATA

International airlines are pinning their hopes on a change of government in Venezuela before some $4 billion owned to the firms by the state might be repaid, a top executive with the International Air Transport Association (IATA) said on Tuesday.

PANAMA CITY, Sept 10 (Reuters) - International airlines are pinning their hopes on a change of government in Venezuela before some $4 billion owned to the firms by the state might be repaid, a top executive with the International Air Transport Association (IATA) said on Tuesday.

Venezuela has suffered a severe economic and political crisis over the past several years, including wide-spread shortages of basic goods and soaring inflation, which has also caused debts owed to the airlines to pile up.

Due in large part to strict currency controls in place since 2003, the government of President Nicolas Maduro has for years failed to reimburse the airlines in hard currency for ticket sales in local currency.

"Right now, recovering this money is a lost cause," said Peter Cerda, IATA's regional vice president for the Americas, on the sidelines of the Aviation Day industry forum held in Panama City.

"We hope that in the future, when there's a change of administration, it allows us to have a dialogue about recovering that money," he added.

Cerda added that IATA, which represents some 240 airline companies, has not had any talks with Maduro's government in two years.

As Venezuela's economy has continued to shrink, airlines like Delta Air Lines Inc DAL.N, Deutsche Lufthansa AG LHAG.DE and LATAM Airlines Group SA LTM.SN have cut their service to the South American country. Other carriers like Air Canada AC.TO and American Airlines Group Inc AAL.O stopped their flights in and out of Venezuela citing security concerns.

"There isn't much chance the companies will return... The government still owes the industry and until this is fixed it's difficult to expect any improvements," said Cerda.

Venezuela's communications ministry did not respond to a request for comment.

(Reporting by Elida Moreno; Additional reporting by Brian Ellsworth in Caracas; Writing by David Alire Garcia; Editing by Christopher Cushing)

((david.aliregarcia@thomsonreuters.com; +52 55 5282 7151; Reuters Messaging: david.aliregarcia.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Commodities

Latest US Markets Videos

    #TradeTalks: How Investors Start to Position Themselves in front of the Election

    WealthWise Financial CEO Loreen Gilbert joins Jill Malandrino on Nasdaq #TradeTalks to discuss what she is watching in the markets as investors start to position themselves in front of the election.

    Sep 10, 2020

    Reuters

    Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

    Learn More