Delta to cut most Venezuela flights owing to exchange controls

CARACAS, July 7 Mon Jul 7, 2014 1:48pm EDT

CARACAS, July 7 (Reuters) - Delta Air Lines will run only one flight a week to Venezuela instead of one a day because of difficulties repatriating revenue through the country's exchange controls, the company said on Monday.

Venezuela requires airlines to sell tickets in local bolivar currency, but carriers say they are not receiving approval from the exchange control board to turn those earnings back into dollars.

The dispute has led nearly a dozen airlines including American Airlines to reduce or suspend service. The International Airline Transport Association (IATA) says the industry has the equivalent of $4 billion trapped in the South American country.

"Effective August 1st, 2014, Delta Air Lines will reduce its daily service between Atlanta and Caracas to a weekly service, operating from Atlanta to Caracas on Saturdays and returning from Caracas to Atlanta on Sundays," Delta said in a statement.

A spokeswoman said in an email that "the debt created over the past several years due to currency issues made us take a business decision to minimize our risk."

The IATA last month said the Venezuelan government was being "wilfully irresponsible" in preventing airlines from repatriating ticket revenue.

American Airlines cut weekly flights between the United States and Venezuela to just 10 from 48 previously as of July 2, with Miami now the only direct U.S. destination.

President Nicolas Maduro has threatened to kick out airlines that halt flights or restrict service. He recently said a cut in availability of foreign flights was because airlines were using more of their fleet to fly to Brazil for the World Cup.

The government in recent weeks had said it would allow airlines to repatriate revenue at a rate of around 50 bolivars per dollar, from roughly 11 bolivars currently. But the local airlines association this month said that change had been put on hold indefinitely. (Reporting by Brian Ellsworth and Diego Ore; Writing by Peter Murphy; Editing by Tom Brown)

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