CARACAS May 29 Venezuela is making strides toward paying airlines billions of dollars in unrepatriated revenue as it seeks to solve a currency-related dispute that has led some carriers to cut flights to the country, a local airline industry association said on Thursday.
Tame, AeroMexico, Aruba Airlines and Insel Air agreed this week to receive a single payment of around $200 million between them, at unknown discount rates, to cancel debts from 2013, the Venezuelan Airlines Association said on Thursday.
Other international airlines - including Iberia, Air Europa, Air France, TAP and Delta - have either received or will soon get offers from the government for the funds they are owed.
The government requires airlines to sell tickets in the local bolivar currency, but has been slow to allow repatriation of funds under strict foreign currency controls.
ALAV President Humberto Figuera said he was cautiously optimistic the debt issue was on track to be resolved, though much hinged on how and when the payments pan out.
"This is an important week," said Figuera. "It's the start of a solution to this grave problem which has had an enormous impact on Venezuela's connectedness ... (But) there is no certainty in this. If these payments are not made, we will end up in the same situation."
According to ALAV, the money will be paid by 2016 primarily at 6.3 bolivars per dollar, the rate at which carriers had hoped to receive the funds.
Some 24 international airlines have an estimated $4.2 billion trapped in Venezuela, according to ALAV. Many have reduced capacity while some have suspended flights altogether.
Air Canada recently cut flights to Venezuela because of security concerns. Alitalia suspended services due to delays in repatriating revenue.
Some other airlines have severely limited the number of tickets available, sometimes only selling seats a few days in advance of the flight.
Colombia's Avianca said this week Venezuela had agreed to release it $12 million, equivalent to just 4 percent of its unrepatriated revenue of $300 million.
Figuera said this was part of some $111 million released to 11 different carriers recently.
Starting in July, the government will allow airlines to repatriate revenue at a rate of around 50 bolivars per dollar, from roughly 11 bolivars currently.
While that is likely to translate into a price hike for Venezuelans seeking to travel, Minister of Transport Hebert Garcia Plaza said on Thursday that the new exchange rate will make the repatriation process swifter.
President Nicolas Maduro last week denied that airlines were cutting flights because of the country's economic problems. He said they were simply rerouting aircraft to take advantage of consumer demand for the upcoming World Cup soccer tournament in neighboring Brazil. (Editing by Alexandra Ulmer and G Crosse)