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South America’s Largest Low-Budget Airline Says Goodbye to Venezuela

By: PanAm Post Staff - Feb 9, 2016, 12:26 pm

EspañolVenezuela’s economy is tumbling, and foreign companies are among those taking the biggest hits. Due to foreign exchange controls, they can’t send their profits back home, leading many to shut down operations altogether.

The latest company to abandon the Venezuelan market is the largest low-cost airline in South America, Gol Airlines. On February 9, Folha de São Paulo reported:

After months of fruitless negotiations with the Chavista administration to send back home R$351 million [US$90 million], Gol has decided to interrupt the São Paulo-Caracas route it has been operating since 2007.

The firm confirmed the information to Folha. Since the measure has already become effective, the flight scheduled to leave [São Paulo’s] Guarulhos airport for Caracas on Tuesday has been cancelled.

Affected passengers are being assisted to fly with other companies.

In 2014, Gol reduced the frequency of 28 flights per week to Caracas to just 2.

In several meetings with Venezuelan officials, Gol Airlines tried to seek a solution to send home accumulated profits at a more favorable exchange rate, but not even the mediation of the Brazilian Embassy and the International Air Transport Association (Iata) was enough.

The second largest Brazilian airline thus joins Alitalia and Air Canada in abandoning the Venezuelan market due to untenable business conditions.

[adrotate group=”7″]In 2014, American Airlines, one of the airlines that flew the most between Venezuela and the United States, cut down from 48 flights per week to 10. Delta Air Lines also slashed its Venezuelan services by 85 percent.

Folha also suggests that TAM Airlines, Brazil’s largest airline and one of the largest in Latin America, might be considering leaving Venezuela altogether as well.

The Venezuelan government owes more than US$3,9 billion to the airline industry, according to Iata.

Gol Airlines will be able to use its retained capital in Venezuela to buy real estate or other goods to protect the value of its assets in the country.

TAM Airlines, which has already reduced flights to Venezuela to one per week and has R$161 million [US$41 million] blocked in the country, has refused to say whether it will keep operating there.