Caracas Holds World’s Airlines as Financial Hostages Reply

Caracas Withholds 4B in Debt Owed to Airlines

Alitalia joins other airlines suspending or reducing flights to Venezuela

By Rafael Romo, Senior Latin American Affairs Editor

(CNN) — First, Air Canada decided to suspend all of its flights to Venezuela in late March. And now, Alitalia is following suit.

In a statement sent to CNN, the Italian airline says that it’s suspending the flights “due to the ongoing critical currency situation in Venezuela,” which is “no longer economically sustainable.

The suspension goes into effect on June 2.

For the last 11 years, Venezuela has tightly controlled all cash flow within its borders. Under the Venezuelan system, all money collected in ticket sales has to be deposited into an account controlled by the government. No funds can be withdrawn from the account without permission from the officials who control it.

The government sets exchange rates for different sectors of the economy, according to priorities also set by officials.

“The bottom line is the airlines are asking for their money; the money that they’ve earned for services provided in transporting passengers from and to Venezuela. Unfortunately, again, the government is holding that money and not releasing it to the airlines,” said Peter Cerda, regional vice president for the International Air Transport Association, which represents airlines around the world.

He calls the situation “an urgent issue.”

In an interview with CNN, Cerda said Alitalia is not the only airline facing problems. In fact, he says, Venezuela owes 24 airlines around the world a combined $4 billion.

Feature continues here:  Caracas Holding Airlines as Financial Hostages

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