The Venezuelan government's insistence on blocking airlines from taking money they've earned from selling tickets inside the country just cost them their biggest carrier.
American Airlines this week announced it will drastically cut its flights from the U.S. to Venezuela to just 10 a week, a near 80 percent reduction that comes in response to the ongoing dispute - and the fact that American is owed a whopping $750 million by Venezuela.
American has the most flights to Venezuela of any U.S.-based airline.
American joins Alitalia and Air Canada among some 11 airlines that have either reduced or cut altogether its service to Venezuela.
At issue is the way the country takes in money for airline tickets and then distributes it. Venezuela insists all money collected in ticket sales must be in bolivars, which it then deposits into a government-controlled account. The government then disperses the money.
But there have been no dispersals. The government is running out of money and has not made any payments.
"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," Peter Cerda, regional vice president for the International Air Transport Association, told CNN last month. "Unfortunately, again, the government is holding that money and not releasing it to the airlines."
The IATA estimates Venezuela owes almost $4 billion collectively to nearly a dozen airlines. The government has made offers of repayment to most of the airlines, and most of them have been universally rejected because of the poor terms - substantially reduced from the original amount owed and long, drawn-out repayment schedules.
Lufthansa last week issued a profit warning to its investors and noted that the $81 million it is owed from the Venezuelan government was a contributing factor.
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