Alitalia (AZA, Rome Fiumicino) will terminate its twice weekly Rome Fiumicino to Caracas Simón Bolivar service with effect from June 2. The international press reports the move was spurred on by a lack of progress made in securing ticket-sale revenue currently frozen in the Latin American country.
Venezuelan president Nicholas Maduro and his government have dithered on the disbursement of over USD4billion in foreign currency to international carriers despite assurances in early April that a disbursement would be made at an acceptable exchange rate.
Last week, Lufthansa (LH, Frankfurt International) announced the suspension of ticket sales to Caracas - its most profitable South American route - while Panama's Copa Airlines (CM, Panamá City Tocumen International) announced it would reduce its services to Venezuela on the back of USD488million owed it by Caracas.
TAME Ecuador (Quito International) and Air Canada (AC, Montréal Trudeau) have already suspended their respective services citing, among other reasons, the country's deteriorating socio-political stability.
Under the previous Hugo Chavez regime, Venezuela introduced currency controls in 2003 as a means of preventing capital flight, and maintaining the stability of the local currency, the bolivar. However, since the introduction of the controls, inflation has soared resulting in the bolivar being devalued over seven times. To compound matters, hindrances in accessing foreign exchange have resulted in the development of a parallel black market where trading rates are almost 10x the value of the official rate.
