American Airlines further isolates Venezuela
The airline announced it will cut services to Venezuela over unpaid debts. There are signs Venezuela is taking steps to prevent more airlines and foreign companies from doing the same.
An American Airlines plane sits on the tarmac at Simon Bolivar International Airport in Maiquetia, Venezuela, January 2007. American Airlines said Tuesday, June 17, 2014 that it will cut nearly 80 percent of its flights to Venezuela in a dispute over unpaid debts.
Rafael Moreno/AP/File
American Airlines鈥� decision this week to cancel most of its flights to Venezuela could embolden more firms to quit the South American nation until the socialist government repays its billions of dollars in foreign debt.
鈥淭his isn鈥檛 the first airline to say it鈥檚 cutting back on service, but it鈥檚 certainly the biggest,鈥� says our correspondent in the Venezuelan capital, Caracas. 鈥淭his will send a big signal to the government about what鈥檚 to come.鈥�
The oil-rich but economically troubled South American nation owes nearly聽$4 billion to foreign airlines, including $750 million to American Airlines. Amid an impasse over how to repay the debts, American Airlines announced Tuesday it will stop servicing flights between Venezuela and New York, Dallas, and Puerto Rico starting July 2. Of the carrier鈥檚 48 current weekly flights, only 10 will remain from Miami.
But there are also signs that President Nicol谩s Maduro鈥檚 government is taking聽proactive steps to prevent more airlines and foreign companies from curtailing business with Venezuela.
Following American Airlines鈥� announcement, the government announced a significant cabinet reshuffle in ousting Planning Minister Jorge Giordani 鈥撀燼 longtime ally of the late President Hugo Ch谩vez 鈥� and making room for more pragmatic economic decisionmaking under Vice President of Economy Rafael Ram铆rez. Only days earlier Mr. Ram铆rez told investors in London that Venezuela needs to unify its聽three official foreign exchange rates that Mr. Giordani helped split up.
鈥淎 lot of analysts are saying this might open a venue for the pragmatists,鈥� says our correspondent.... For the rest of the story, continue reading at our new business publication聽