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Air Canada may resume flights to Venezuela if outstanding issues addressed

MONTREAL - Air Canada says it may resume flights to Venezuela that were suspended in March if outstanding issues, including passenger revenues being held by the South American country's government, are addressed.

However, the airline on Monday denied a published report in Venezuela that said it had informed the government of its intention to resume scheduled service.

"Once we are satisfied circumstances permit and the repatriation of funds is addressed, we would certainly evaluate the re-introduction of flights with the objective of resuming operations," spokeswoman Isabelle Arthur wrote in an email.

The South American country's tourism minister, Andres Izarra, was quoted saying Air Canada (TSX:AC.B) had sent three letters expressing its interest in resuming flights.

He added that airlines will never shut down their operations to the "buoyant market."

An international association representing global airlines says US$1.4 billion of revenues are being held by the Venezuelan government in breach of international treaties.

IATA director general and CEO Tony Tyler recently said there is little chance of Venezuela's economy recovering unless air transport resumes.

"Air transport is a catalyst of economic growth and is a critical component of Venezuela’s economic well-being and a vital link to the global economy," he said in a news release.

Air Canada was one of several global carriers that suspended flights, citing on-going civil unrest that prevented it from ensuring the safety of its operations.

Prior to the suspension of flights, Air Canada operated three return flights weekly between Toronto and the Venezuelan capital.

International capacity to and from the country is down 49 per cent from peak levels last year and 36 per cent from last summer.

The Montreal-based carrier suspended flights a few days after Venezuelan President Nicolas Maduro said any airline that reduced or suspended flights in and out of Venezuela would face severe measures.

Maduro had said any airline that leaves won't be allowed back while he is in power.

American Airlines said Monday it continues to work with the Venezuelan government on a resolution, but reduced its weekly flights from 48 to 10, including one daily flight from Miami to Caracas.

"We value our business and long-standing relationships with the government. However, since we are owed a substantial outstanding amount and have been unable to reach resolution on the debt, we have significantly reduced our flights to the country," said spokeswoman Martha Pantin.


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