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United Airlines ends flights to Venezuela, further isolating country

by Reuters
Saturday, 3 June 2017 19:22 GMT

By Girish Gupta

WASHINGTON, June 3 (Reuters) - United Airlines will end its daily flight service to Venezuela in July, further isolating the crisis-hit South American country from international travel after the exit of many major airlines in recent years.

Many airlines have left after a protracted dispute over billions of dollars they say the government owes them. They say President Nicolas Maduro's administration has failed to reimburse companies in hard currency for ticket sales in local currency, as per strict currency controls in the socialist nation.

United, which flies daily between Caracas and Houston's George Bush Intercontinental Airport, confirmed to Reuters that it was halting that route, though said it was not because of any payment dispute.

While the flight is popular with Texas-based oil executives and Venezuelans living in the United States, few tourists travel to the crisis-stricken country and flights often have low occupancy.

"In every market we serve, we continually review demand for service and because our Houston-Caracas service is not meeting our financial expectations we have decided to suspend it, effective July 1," United spokesman Charles Hobart said in an email to Reuters.

In addition to currency disputes and low occupancy on flights to Venezuela, airlines also fret about security for their crews on the ground.

Unrest prompted by food shortages has resulted in the deaths of at least 64 people since April. On Saturday, a few hundred activists staged a protest in western Caracas.

United in April added a one-hour stop in the Caribbean island of Aruba to its Houston-to-Caracas leg, a move analysts said was to ensure crews would not have to stay overnight in Venezuela.

Airlines from Lufthansa to Air Canada have pulled out of Venezuela in recent years, citing everything from the payment dispute to safety concerns.

The largest U.S. carrier in the country, American Airlines , slashed 80 percent of flights in 2014. Two years later, the Fort Worth-based company wrote off $592 million it said was stuck in Venezuela due to the government's failure to exchange it for hard currency.

The International Air Transport Association said last year that $3.78 billion was owed to international airlines by Venezuelan authorities. A handful of airlines including Copa and Avianca - part of the Star Alliance network alongside United - as well as Air France and Iberia, continue to operate in the OPEC nation.

(Reporting by Girish Gupta; Editing by Alexandra Ulmer and Jonathan Oatis)

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