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Airlines Cut Venezuela Flights After Bolivar Devaluation

Jan. 30 (Bloomberg) -- At least three international airlines are cutting flights to Caracas after the Venezuelan government reduced the rate at which they get reimbursed for ticket sales in bolivars.

Grupo Aeromexico SAB reduced flights from Mexico City to five per week from seven last month, according to data provided by the Mexico City International Airport. Air Europa’s spokesman said the airline is cutting flights from Madrid to five per week from six in March, while Air Canada will reduce weekly flights from Toronto to four from five in February and to three in May, according to schedule posted on the website.

Air Europa is reassigning seats to increase sales in Europe, a spokesman for the parent company Globalia Corporacion Empresarial SA said from Madrid today. All passengers on the canceled flights have been accommodated for other dates, he said.

Economy Vice President Rafael Ramirez said Jan. 22 the carriers will have to use a higher, secondary exchange rate determined at weekly auctions when applying to convert bolivars from new sales into dollars. The rate set at the latest auction was 11.36 bolivars per dollar, compared with the official rate of 6.3. Airlines had the equivalent of $3.3 billion in bolivars trapped in Venezuela on Jan. 10 as the government tightened the supply of dollars, according to the International Air Transport Association.

Devaluation, ‘Adjustments’

Foreign airlines cut the capacity on their Venezuela flights by 1,000 seats to 55,025 in the last 12 months, according to industry data provider Innovata LLC.

Air Canada spokeswoman Isabelle Arthur said “schedule adjustments are part of our normal schedule planning” in an e-mailed response to questions. Aeromexico spokesman Carlos Torres declined to comment on how many times they fly to Caracas. Air Canada and Air Europa suspended ticket sales in bolivars this month.

The head of Venezuelan foreign trade body, Alejandro Fleming, said last week the government will respect the old 6.3 rate for the existing debts with airlines.

The government ordered the partial devaluation of the bolivar after the country’s reserves reached a 10-year low.

To contact the reporter on this story: Anatoly Kurmanaev in Caracas at akurmanaev1@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net

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