Venezuela warns airlines not to cut flights amid debt woes

[Zorro]

Source: Reuters

President Nicolas Maduro on Friday warned airlines not to limit flights in and out of Venezuela, a day after reports a Colombian airline was reducing services to Caracas amid industry complaints of billions of dollars in unpaid debts.

"Airlines have no excuse to reduce their flights to Venezuela," Maduro said during a press conference.

"If airlines reduce (flights), I will take severe measures."

Airlines have struggled to obtain dollars in exchange for the bolivar currency as a result of long-running delays in Venezuela's 11-year-old currency control system.

Read more: http://news.yahoo.com/venezuela-warns-airlines-not-cut-flights-amid-debt-201758165--finance.html

[CVN-68]

1. Maybe if the govt paid their bills,

this wouldn't be an issue.

Honest question, what severe measures could he take, other than throwing a tantrum?

[Archae]

2. Since this is Maduro, he'll take the next step in his "logic."

He'll have his goon squads seize airliners.

[christx30]

3. Now would be a good time for the

airlines to cancel flights and get those planes (and everything that's not nailed down) out of the country before it's all stolen by Maduro.

[CVN-68]

4. I just had this vision of him trying to seize a jetliner

rolling out for take off and him hanging on the the nose wheel shaking his fist and demanding they stop and give up.

[joshcryer]

7. Good luck with that. They wouldn't be able to fly anywhere.

They'd just be taken back when they land where ever. What's he going to do? Install national guard on every plane and shoot anyone trying to seize them?

[Yo_Mama]

10. He could refuse to ever pay the bills he hasn't paid yet!!!

Really, that's the hold. That he would never repay the back bills.

[Tarheel_Dem]

5. "Severe Measures"?

[freshwest]

6. Would those be United States Dollars referred to here?

Airlines have struggled to obtain dollars in exchange for the bolivar currency as a result of long-running delays in Venezuela's 11-year-old currency control system.

They need American dollars to do business because of the inflation of the bolivar, is all I can guess.

Don't understand delays in a currency control system, either. Isn't there some sort of international agency to set up the values of currencies across the world?

That seems like an excellent way to go broke, not having anyone believe your money is backed by anything.

I've read about the IMF and World Bank associations, but am reckoning Venezuela and either Chavez or Maduro did not want to get in bed with them, as they have a mixed record.

From everything I've seen, VZ is being run on a barter economy which some futurists hold is a more sustainable form of exchange. But it may not work.

The US$ was once called the 'Petrodollar' and Iguess the bolivar could be considered another such currency.

Really, my eyes glaze over when I see this stuff. Are the problems in VZ related to poor management there, or poor international relations?

What a mess.

[joshcryer]

8. The exhange control rate is about 6 bolivars to the dollar.

However the black market rate for dollars in Venezuela is closer to 75 bolivars for each dollar. You can see how this makes the situation very unsustainable. Fly to the US, go to a bank, take out 1000 dollars you have 7500 bolivar. Rinse repeat.

Here's the thing, airlines have been charging outrageous prices to fly from Miami to Caracas for years under this. $4000 a ticket. Or 24000 bolivar. For a 3 hour flight. A flight to Vegas from say Denver is like $200. Rich people can buy the flights to Miami because they have access to dollars and can sell dollars for bolivars on the black market. That $4000 ticket then becomes a $320 ticket! So what's happening is that the government can't provide dollars to bolivars because people, both the airlines, and civilians, are making serious bank, all while inflation rises insanely.

Doing something the poorest Venezuelans couldn't do because they don't have Miami connections.

[EX500rider]

9. Actually the airlines have to charge double on the dollar fares..

....to make up for the other half bought in near useless Bolivars. Venz. owes about 3 billion to various airlines.

airliners.net has a thread on it here:

http://www.airliners.net/aviation-forums/general_aviation/read.main/6024526/