United Airlines Inc. will suspend flights to Venezuela next month, a move that further cuts off access to the Latin American nation engulfed in violent political protests and economic chaos.
The daily service between Houston and Caracas will be canceled because of low demand, United spokesman Charles Hobart said in an email. “Because our Houston-Caracas service is not meeting our financial expectations we have decided to suspend it, effective July 1,” he said.
The Venezuelan government has faced almost two months of anti-government protests. It has drastically cut imports of food and medicine in order to conserve the cash needed to pay bondholders, as oil production declines and international reserves hover near a 15-year low.
United, whose flights to Caracas have been popular with oil executives in Texas and Venezuelans living in the U.S., is the latest in a string of airlines to pull out or cut exposure to socialist Venezuela. Only last month, TAP-Transportes Aereos Portugueses stopped selling plane tickets in Venezuela because it wasn’t getting the money from those sales.
Last year, carriers asked the U.S. Department of Transportation for antitrust immunity so they could discuss ways to retrieve $3.8 billion held hostage by Venezuela’s economic collapse, with the government virtually halting repatriation of past ticket sales made in bolivars, the local currency.
American Airlines Group Inc., which had been the largest carrier by capacity to Venezuela, took a $592 million special charge in 2015 to write down the value of its ticket sales in bolivars. Delta Air Lines Inc. has also written down the value of past Venezuelan sales in bolivars. It has cut flights dramatically since 2014.
Last year, Chile-based Latam Airlines Group SA also suspended its Caracas service from Brazil, Chile, and Peru; Grupo Aeromexico SAB ended flights between Venezuela and Mexico City; and Deutsche Lufthansa AG dropped its flights from Frankfurt. Air Canada left Caracas in March 2014, citing the civil unrest.
–With assistance from Justin Bachman
©2017 Bloomberg L.P.
This article was written by Andrea Wong and Jonathan Gilbert from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to email@example.com.