The situation in Venezuela is expected to get worse before it gets better. While that view extends across many industries, this week"™s IATA Annual General Meeting sees the aviation sector in focus and the situation is ugly. IATA"™s Regional VP for Americas, Peter Cerda, spoke to the issues during a briefing on the eve of the main meeting in Cancun, highlighting Venezuela"™s troubles as among the list of challenges the industry faces in Latin America.
The $3.8 billion in foreign currency trapped in Venezuela is a major problem for the airlines that operate there. Between the difficulties in getting money out and the ever worsening civil unrest in the country more airlines are choosing to walk away completely. The latest to make that decision is United Airlines, which will halt operations in Venezuela as of 1 July. It previously adjusted its schedule to have crew overnight in Aruba rather than in Caracas to address the safety concerns, but the economics remain a massive challenge.
IATA has been pressing the issue for years now but little progress has been made in helping foreign carriers repatriate their monies. Cerda describes the group"™s efforts as ongoing but hamstrung by the Venezuelan government"™s focus on other areas. "The industry is trying to be sympathetic. Airlines don"™t want to pull out of Venezuela. But we are getting to a point where airlines need to make business decisions. We continue to advocate with the government to try to find solution"¦ But unfortunately at this time we have not reached common ground between the government and the industry»…
