The International Air Transport Association (IATA) has once again called on the Venezuelan government to urgently honour the commitment made in March 2014 to permit the repatriation of what has now grown to over $4 billion of airline funds at fair exchange rates. While the government has permitted the repatriation of $424 million shared among a number of airlines, continuing sales in the country have seen the total amount owed grow to a staggering $4.1 billion, says the industry organisation.
IATA cautioned that that failure to release the airline monies puts at risk a major contributor to the well-being of the Venezuelan economy—sustainable air connectivity. Airlines can no longer afford the risk of not being paid when providing services to Venezuela and, according to IATA data, international capacity to and from Venezuela is down 49 per cent from peak service levels offered last year and 36 per cent lower year-on-year as flights are cancelled or frequencies reduced.
"Airlines cannot offer service when there is no certainty of payment. The Venezuelan government has made many promises to abide by its obligations. But $4.1 billion remains unpaid. Confidence in the market is falling sharply. Most carriers are limiting their risk with reduced capacity. Several have completely pulled out. Venezuela risks becoming disconnected from the global economy," said Tony Tyler, director general and chief executive officer, IATA.
The blocked monies are from ticket sales in Venezuela and are being held by the government in breach of international treaties. Considering that the global air transport industry is expected to post a collective $18 billion profit this year, the outstanding $4.1 billion is very significant.
"Venezuela, like all nations, reaps enormous benefits from air connectivity. Air transport is a catalyst of economic growth and is a critical component of Venezuela’s economic well-being and a vital link to the global economy. Air transport could also play a significant role in the Venezuelan economic recovery. Without robust air links to the world, there is little chance of a recovery," said Tyler.
In a fourth letter to President Nicolas Maduro on the topic of the blocked funds, IATA called on the President to lead a high-level dialogue with IATA on behalf of the two dozen airlines whose money is at stake. The goal should be to clear the debts quickly in a way that is fair and acceptable to the airlines involved, said IATA and to move this forward, Tyler has requested a meeting with the President to scope out grounds for a potential agreement.
“Protecting Venezuela’s connectivity should be a high priority for the Venezuelan government—connectivity is a lifeline for the country’s faltering economy. IATA is ready to contribute to a positive solution for all parties but we cannot move forward without the engagement and cooperation of the government," added Tyler.
Globally, airlines will transport around 3.3 billion passengers and 52 million tonnes of cargo in 2014. This activity supports jobs for 58 million people worldwide. And airlines deliver over a third of the goods traded internationally by value—worth some $6.8 trillion, according to IATA statistics.
In our analysis, below, we look more closely at international flight operations from Venezuela between 2012 and 2014 using data from OAG Schedules Analyser. The information shows that after modest declines in February 2014 and March 2014, international air capacity from the country was down a notable 10.1 per cent in April 2014 versus the same month last year. This trend has continued over the following months with international capacity down 15,4 per cent in May 2014; 19.5 per cent in June 2014; 26.8 per cent in July 2014 and forecast to be down 32.8 per cent next month. Advanced schedules suggest that rates of decline of above 20 per cent will continue for the rest of the year.
Data provided by 
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