Lufthansa and Latam to halt flights to Venezuela
Another sign of deep trouble in Venezuela: Lufthansa, one of Europe’s largest airlines, said it will stop flying to the country. The company announced Sunday that beginning June 17, it will suspend flights indefinitely to Venezuela, which is grappling with a daunting economic and humanitarian crisis.
Andreas Bartles, a Lufthansa spokesperson, said there’s two reasons for the decision. First, there simply isn’t enough demand — particularly among business travelers — to fill flights. Second, the company is having trouble converting Venezuelan currency, which uses complicated multi-tiered exchange rates.
Venezuela is heavily reliant on its massive oil reserves, and two years of stubbornly low oil prices have strangled the country’s economy.
And fewer flights on Venezuelan runways is far from the country’s only problem. The economic crisis has spurred food rationing, medicine shortages, and mass unemployment. The International Monetary Fund expects unemployment to hit a staggering 21% next year.
The government has ordered rolling blackouts to conserve power, and employees in the public sector are working only two days a week.
The downward spiral has caused concern for many international companies. Last year, multiple air carriers — including U.S.-based Delt ()and American Airline a ( )s well as Air Canada and Europe-based Alitalia — made plans to reduce or suspend Venezuelan flights.
The largest airline in Latin America, Latam, says it is suspending its flights to Venezuela because of the worsening economic situation.
The suspension came a day after Germany’s Lufthansa said it would suspend its services to the country.
The German company said Venezuela owed it millions in ticket revenues.
Oil-rich Venezuela has been hit hard by the global drop in oil prices and suffers from high inflation and a chronic shortage of basic goods.
Several airline companies have said that currency controls in Venezuela made it impossible for airlines to convert their earnings into dollars and send the money abroad.
In a statement, Latam airlines said it would suspend its operations to Caracas airport “temporarily and for an unspecified time”.
It said flights on its Sao Paulo to Caracas route would end first, within days, and the other routes it runs to Caracas from Lima and Santiago would be halted by the end of July.
International Monetary Fund has predicted that inflation in Venezuela will hit 720% this year. That might be an optimistic assessment, according to some local economic analysts, who expect the rate to reach as high as 1,200%.
A sharp drop in global prices for oil — on which Venezuela depends for most of its foreign currency — is a big part of the problem. Critics also accuse the government of irresponsible spending on social welfare programs and oil subsidies to Cuba and other countries.
To understand what that kind of inflation means, we spoke to Maria Linares, a 42-year-old single mother who works as an accounting assistant at a government ministry and lives in an impoverished neighborhood of the capital, Caracas.
Her monthly pay, including a food allowance, is 27,000 bolivars.
That’s $2,700 a month at the official exchange rate of 10 bolivars to the dollar. But Venezuelans have so little faith in their currency — or the government’s ability to fix the country’s deepening economic crisis — that a dollar can fetch upward of 1,000 bolivars on the black market. At that rate, Linares earns just $27 a month.
venezuela is being isolated and shut down..in real time..
“International Monetary Fund has predicted that inflation in Venezuela will hit 720% this year.”
who will they go to for help(aka $$$)?