Venezuela’s economic troubles are increasingly leaving the nation isolated from the rest of the world. Recent news reported by Noticias 24 by airlines Lufthansa and LATAM to pull out from the country have just made things worse. The two join a growing list of airlines that have stopped service to Venezuela or significantly curtailed their operations there. Unless the situation improves, it is likely that others will join them.
The reasons why airlines are leaving Venezuela are simple says expert Jose Manuel Gonzalez: an inability to repatriate their revenues and dropping passenger numbers. Venezuela has imposed currency controls in 2003. These controls require companies operating in the South American nation to receive permission from the government before they can exchange the local bolivares for hard currency, such as US dollars. But lately, the country has faced a significant shortage of foreign currency and few such requests have been approved.
According to industry news reports showing data from the International Air Travel Association (IATA), Venezuela tops the list of countries blocking repatriation of airline funds, with nearly $3.8 billion held for 16 months so far.
Another reason that airlines are finding operating in Venezuela unprofitable is the lack of passengers due to the fact that few people can afford to travel at this time. IATA numbers show that passenger numbers for Venezuela’s main airport have been down in the last two years, while other nations in the region, like Peru and Colombia, have seen large increases.