RIO DE JANEIRO Feb 9 Brazilian airline Gol
Linhas Aereas Intelegentes SA, suspended operations
to Venezuela's capital Caracas until it can settle a dispute
over the transfer of money out of the country and back to
Brazil, the company said in a statement on Tuesday.
The money is being held in Venezuela under the country's
strict currency controls, a system that has led other airlines
to take writedowns on Venezuelan operations or suspend ticket
sales and service to the country.
Airlines have $3.9 billion of resources trapped in
Venezuela, according to the International Air Transport
Association, or IATA. The government requires all tickets to be
sold in local currency but makes it difficult for the airlines
to convert that local revenue into dollars.
The Venezuelan Bolivar though has been shrinking,
reducing the foreign currency value of the local ticket sales.
"Gol temporarily suspended its operations in Caracas,
Venezuela until the issue of repatriation of company resources
in the country is resolved," the statement said. "Clients
affected are being re-booked on other airlines and receiving all
Gol gave no estimate as to how long negotiations with the
government over the transfers or how long the suspension will
Financially strapped Gol has 351 million Brazilian reais
($90 million) trapped in the country according to Exame, a
Brazilian newsweekly magazine. It has suffered four years of
deep losses exacerbated by falling demand and a strong dollar
that has driven up the Brazilian currency cost of
dollar-denominated fuel, debt and lease payments.
Gol is 9.5 percent owned by U.S.-based Delta Airlines Inc
, a stake made up entirely of non-voting preferred
Venezuela's currency controls currently disburse dollars for
6.3 bolivars to the dollar for preferential goods such as food
and medicine, but also use less advantageous rates including 12
and 200 to the dollar for less important products.
On the black market, U.S. dollars fetch 1,016 bolivars - an
81 percent depreciation from a year ago when dollars sold for
(Reporting by Jeb Blount, additional reporting by Brian
Ellsworth in Caracas; Editing by Lisa Shumaker)