IATA: Venezuela must address blocked funds problem
MIAMI, FL – The International Air Transport Association (IATA) called on the Venezuelan government to address the problem of the $3.7 billion in airline funds the government is withholding from the
MIAMI, FL – The International Air Transport Association (IATA) called on the Venezuelan government to address the problem of the $3.7 billion in airline funds the government is withholding from the airlines.
The blocked money was generated from airline ticket sales in Venezuela and is being withheld in breach of international treaties.
Venezuela has a complex system of currency controls in place by which the government dictates when and how much revenue airlines can repatriate from the country.
Venezuela’s difficult economic situation is not an excuse to delay addressing the issue, which is unfair to airlines and inconvenient to passengers, who are the victims of a debilitated air network. IATA called on the intervention of the Venezuelan government in three areas:
• Exchange rates: Establish a single and fair Bolivar (VEF) exchange rate for the sale of tickets and for the payment of airline fees and charges. Currently, airlines are forced to sell tickets using an exchange rate of 12 VEF to the US dollar (USD) and make payments such as those for airport use at a floating rate that currently stands at 199 VEF per USD.
• Payment Schedule: Work with airlines to establish a realistic and achievable payment schedule to settle the blocked funds.
• Consultation: Commit to the global best practice of consulting the industry before imposing any new taxes or regulations that affect airlines.
“The Venezuelan government must take action to resolve this untenable situation with the airlines. In Latin America, aviation supports over 4.9 million jobs and generates $153 billion in economic activity. Air connectivity in Venezuela has suffered because of the lack of progress over the blocked funds issue and the deterioration in the operating environment. I urge the government to work with the airline industry to resolve the problem once and for all,” said Tony Tyler, IATA’s Director General and CEO.