LATAM becomes latest casualty in Venezuelan exodus

In August last year the two South-American carriers, LAN and TAM merged to become South America’s largest carrier covering over 135 destinations in 23 countries for passengers, and a cargo business offering freight services to more than 144 destinations in 26 countries. The airline owns a fleet of approximately 312 aircraft and has roughly 53,000 employees. However, the merger has failed to stop the airline, based in Santiago, Chile, from falling victim to current problems in Venezuela and, as such, it will now be suspending all operations in the country.
At present the Venezuelan government has been withholding airline funds while it struggles to convert the local bolivar into hard currency. Rocketing inflation has not helped this situation, while also taking international travel out of reach of many Venezuelans. It is understood the cash-strapped government is holding on to approximately US$3.8 billion owed to airlines, including LATAM.
According to a recent statement, “LATAM Airlines will suspend temporarily and for an undefined time its operations to Caracas airport.” This means that from the end of May flights between Sao Paulo and Caracas will cease, while those between Santiago and Lima will stop at the end of July. According to a LATAM spokesperson, over US$3.0 million is currently tied up in Venezuela.
Last weekend Lufthansa announced that it will cease flights to Caracas owing to a US$100 million debt, while Aerolineas Argentinas has cut flight frequency to Venezuela by over 70%. Alitalia, Air Canada and Gol have all ceased operating in Venezuela, while American Airlines only now flies from Miami to Venezuela.
Many carriers that still operate in Venezuela now require passengers to pay in hard cash, including Air France, United and Liberia, but the ongoing economic problems in both Venezuela and Brazil have seen airlines concentrate more on areas of growth, such as Peru. The withdrawal of LATAM from Venezuela will not have a substantial effect on the company though as the currently suspended routes only account for 1% of its operations.