AIRLINES HALT TICKET SALES IN VENEZUELA

Airlines halt ticket sales in Venezuela

Associated Press

By FABIOLA SANCHEZ January 24, 2014 5:12 PM

A woman speaks on her cell as she seeks information about flight sales from a closed United Airlines office in Caracas, Venezuela, Friday, Jan. 24, 2014. Delta, American Airlines and Panama's Copa Airlines were also among carriers whose offices were either closed or had halted sales on Friday after the government devalued the local currency for flights abroad. (AP Photo/Alejandro Cegarra)
.
CARACAS, Venezuela (AP) — Tempers flared at airline offices in Caracas on Friday as Venezuelans reacted angrily to international carriers' refusal to sell tickets after the government devalued the bolivar for flights abroad.

The offices of American Airlines, Delta, United and Panama's Copa were all either closed or had halted sales for several hours on Friday as the higher exchange rate took effect, adding to uncertainty as carriers try to collect $3.3 billion they say they're owed by the socialist government.

"Don't waste your time," a United representative, sticking her head out from behind a closed glass door, told a group of 10 waiting customers standing outside a ticket office at Caracas' Centro Lido shopping mall. "It's out of our hands. We can't sell any more tickets."

When customers protested that they would never experience such poor service in the US, the agent, who didn't identify herself by name, said "our situation is different than the US" and then quickly closed the door shut.

Megan McCarthy, a spokeswoman for United in Chicago, said the airline continues to sell tickets in Venezuela but acknowledged that they had been halted for a few hours as prices in its system were adjusted. United has a single daily flight between Houston and Caracas.

"When the exchange rate was updated, we had to hold selling them," she said, adding that online sales had resumed and its ticket office in Centro Lido would reopen at regular hours on Saturday. "We apologize to our customers who we did not explain this to."
View gallery
Security guards sit inside a closed United Airlines …
Security guards sit inside a closed United Airlines office as customers waiting outside for informat …

Gretty Sivira, a 39-year-old teacher, traveled six hours overnight by bus from Barquisimeto to change the date of a flight to Mexico with Copa after trying for two weeks unsuccessfully through her travel agent.

"There's no solution," she said with look of helpless worry.

Airlines are also losing patience.

For the past few months they've been locked in a battle with President Nicolas Maduro's cash-strapped government to repatriate $3.3 billion that it says is trapped inside the country by rigid currency controls. The situation worsened this week when the government said that revenue from ticket sales in bolivars would now be converted at a new exchange rate almost twice as high as the official 6.3 bolivar per dollar exchange rate.

That nominally makes flying costlier for the vast majority of Venezuelans. But tickets purchased in the country are still a bargain, in dollar terms, given the bolivar's plunge to less than a tenth of its official value on the flourishing black market.

Weeks of closed-door meetings have so far failed to produce a deal, with airlines balking at the government's offer to honor the debt with a combination of bonds, cash and jet fuel, which is cheaper to produce in the oil-rich nation.
View gallery
A woman stands outside a closed United Airlines office …
A woman stands outside a closed United Airlines office in Caracas, Venezuela, Friday, Jan. 24, 2014. …

On Thursday, United Chief Financial Officer John Rainey said the airline has about $80 million in cash "trapped" in Venezuela while it waits to find out which exchange rate the government will make it use to bring the money back to the U.S. The airline said it works to adjust prices for tickets sold in Venezuela to account for the changes in currency exchange rates.

In the meantime, the travel plans of millions of Venezuelans are in doubt amid fears that some airlines could follow the example of Ecuador's TAME airline, which this week announced it was suspending its daily flights to Venezuela until the government pays it $43 million it says it is owed for ticket sales in the country.

Images broadcast on Ecuadorean television Friday showed several Venezuelan passengers, some of them children, stranded at Guayaquil's international airport.

"We're stuck here, without money, we're hungry and we're desperate to leave," Lorena Villasagua told Ecuavisa network.

Attempts by The Associated Press to make reservations by phone at several airlines including Copa, United and Air Canada also failed, with agents saying that they're waiting for the government to clarify the new travel restrictions. Travel agents also said they were blocked by most airlines from making reservations.

Airlines insist they are being overwhelmed by demand.
View gallery
A woman reads a notice on the door of a closed Delta …
A woman reads a notice on the door of a closed Delta Airlines office in Caracas, Venezuela, Friday, …

"There may not be any availability but that doesn't mean we're halting sales," Martha Pantin, a spokeswoman for American in Caracas, told the AP. She refused to comment on how the government's measures would affect the airline.

Adding to travelers' misery are tighter restrictions on the amount of US dollars Venezuelans can spend abroad in Florida and other international destinations that have been inundated by Venezuelans desperately trying to shuttle abroad as much hard currency as they can under the rigid foreign currency exchange system.

Travelers just to Florida will be allowed to charge a maximum of $700 annually on their Venezuelan credit cards and will be allowed to buy no more than $300 in cash, according to the rules published in the Official Gazette on Friday. That compares with limits of $2,500 in credit and $500 in cash they were previously allowed for trips to Florida, an amount that will be maintained for the remaining 49 US states. Cash allowances were also reduced for Costa Rica, Colombia, Panama and Peru.

The socialist government hopes that the tighter restrictions will help cool capital flight, which has drained central bank reserves by 30 percent over the past year.

But in Doral, a suburb of Miami known as "Doralzuela" for the large number of Venezuelans who live and visit there, tourists were stunned by the new rules.

"They're holding the population hostage," Julie Gonzalez said at the Baymont Inn & Suites. The 62-year-old doctor said she already received cash and credit totaling $3,000 under the previous rules for her current trip but that future travel to Florida, where her son lives, would be impossible.

She said $300 in cash and $700 in credit wouldn't be enough to cover food and lodging. "It's an extreme measure for us because it means we won't be able to leave the country."

___

AP Writers Joshua Goodman and Jorge Rueda contributed to this report. Christine Armario contributed from Miami and Gonzalo Solano from Quito.