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luisde8cd
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AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 1:07 pm

Due to the $750 million that the Venezuelan govt. owes to AA, for its ticket sales in local currency, AA has decided to cut the following routes from CCS: JFK, DFW and SJU.

Also, MIA-MAR goes down from 7x weekly to 2x and CCS-MIA from 28X weekly to 8 weekly. The changes are effective July 1st.

These cuts follow the withdrawal of Alitalia and Air Canada from the Venezuelan market. Moreover, LH and AF have reduced frequencies and downsized equipment as well.


Source: http://www.flightglobal.com/news/art...ule-as-trapped-cash-mounts-400484/

Saludos,
Luis
 
OP3000
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 1:43 pm

How much of a jump do you think USA-Venezuela and Venezuela-USA fares will see now because of this?
 
A388
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 1:43 pm

Very sad news and I feel for the Venezuelan travelers who will be affected by fewer options to travel to/from the country. Hopefully this will be resolved soon.

A388
 
jetblue1965
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 1:46 pm

At what point are they required to move these trapped funds from "accounts receivables" into "write off" ?
 
blueflyer
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 1:54 pm

The size of the cut makes me wonder whether it isn't a message to Maduro. It will certainly inconvenience some of his cronies who will find it more difficult to go check on their funds safely stashed in Miami and do some shopping.

I wonder how this is going to be spinned. The US beating Ghana is increasing interest in the World Cup and American needs 10 new daily flights to Brazil?

Quoting OP3000 (Reply 1):
How much of a jump do you think USA-Venezuela and Venezuela-USA fares will see now because of this?

With such a capacity reduction, I'd guess you can add a 0 to any fare. This also should have the side benefit that every seat will be sold in dollars by the time the window for sale in bolivar opens up.

[Edited 2014-06-17 07:07:44]
 
yv773p
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 1:57 pm

What are the LFs right now?
Even the lazy jellyfish do it!
 
Okie
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 2:14 pm

Quoting blueflyer (Reply 4):
The size of the cut makes me wonder whether it isn't a message to Maduro. It will certainly inconvenience some of his cronies who will find it more difficult to go check on their funds safely stashed in Miami and do some shopping.

I think Maduro ignores the cuts and maybe even welcomes them as long as there is no discontinuation of service.
Travelers leaving Venezuela can exchange Bolivars for US Dollars at a good rate, actually a pretty hefty profit. Less travelers mean less USD leaving Venezuela which he does not have.

Venezuela has increased to over 70% of their food, goods and services need to be imported. The government has taken control of about anything and everything and manufacturing and farm production has just come to an absolute halt.

I honestly do not think much will change in Venezuela until they run out money to import food. That is probably two years down the road.

Okie
 
2travel2know2
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 2:38 pm

Probably AA didn't have enough smaller aircraft suitable to fly to Venezuela to just do an aircraft downgrade, keeping the frequencies as they are.
Would AA be able by Venezuelan authorities to re-start CCS-SJU/JFK/DFW and/or increase CCS/MAR-MIA frequencies someday?
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westindian425
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 3:09 pm

For a country to owe you over $750 million dollars, I'd doubt the issue is load factor or airframes for downgrade. That is a serious amount. I don't understand why Venezuela would owe airlines close to $3.6 billion!
God did not create aircraft pilots to be on the ground
 
skyone
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 3:18 pm

Quoting 2travel2know2 (Reply 7):

Probably AA didn't have enough smaller aircraft suitable to fly to Venezuela to just do an aircraft downgrade, keeping the frequencies as they are.

I think they already downgraded to the smallest mainline aircraft they have available at MIA. They used to fly 763 and 752 to CCS and then went to all 738s and now they cut frequencies. The A319s are not MIA based, so I am guessing that is the best they could do at the moment, as the next big step would be to leave Venezuela completely, like other major carriers did. And that is a big bet wether they actually think the actual government is or is not going to last.
 
yv773p
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 3:22 pm

Quoting westindian425 (Reply 8):
I don't understand why Venezuela would owe airlines close to $3.6 billion!

Currency controls do that. They simply don't have dollars to exchange the bolivares that the airlines have in Venezuela. I know LF is not the reason they are leaving but maybe having tickets sold at SICADII dampened demand.
Even the lazy jellyfish do it!
 
2travel2know2
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 3:27 pm

Wonder if AA downsizing its Venezuela operations will see an increase on its passenger demand out of AUA, CUR and POS for those Venezuelan passengers who can afford to travel to those airports when flying to/from The States.
I'm not on CM's payroll.
 
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Miami
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 3:38 pm

Bad news for my family. Guess they need to travel with LAN or SBA.

What an embarrassment the government has done to what was once a beautiful county. I know I won't be visiting for a very very long time.
Aviation is proof that given, the will, we have the capacity to achieve the impossible. - Eddie Rickenbacker
 
aa1818
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 3:42 pm

Quoting Jetblue1965 (Reply 3):
At what point are they required to move these trapped funds from "accounts receivables" into "write off" ?

Are we certain that it hasn't been written off already. Dealing with Auditors in Financial Institutions, we've taken write-offs on current facilities where the future repayment "could potentially" be in jeopardy, but which are fully up to date!

Given exchange rate fluctuations/ devaluation/ depreciation I'm sure AA has provided for the full amount of funds trapped in Venezuela.

Frees up a few 757s- perhaps they can send them into the paint shop and end the whole discussion on whether or not AA will paint a 757 in the new colour scheme!!! Just looking on the bright side.

This will hopefully be a boost to the smaller Caribbean airlines who will be the only other option to get to the USA.

Cheers,
AA1818
“The moment you doubt whether you can fly, you cease for ever to be able to do it.” J.M. Barrie (Peter Pan)
 
luisde8cd
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 3:45 pm

Quoting Jetblue1965 (Reply 3):
At what point are they required to move these trapped funds from "accounts receivables" into "write off" ?

Given the large amount of debt, I think it would be logical to expect AA and other airlines to engage in a commercial arbitration process and/or U.S. legal system lawsuits to try to impound Venezuelan assets (i.e. Citgo) in the U.S. If that process fails, then I assume they will have to accept the write-offs.

Quoting okie (Reply 6):
I honestly do not think much will change in Venezuela until they run out money to import food. That is probably two years down the road.

I think that will happen sooner than that.

Quoting 2travel2know2 (Reply 7):
Would AA be able by Venezuelan authorities to re-start CCS-SJU/JFK/DFW and/or increase CCS/MAR-MIA frequencies someday?

Of course, as soon as the current authorities get replaced by a truly democratic government.

Quoting skyone (Reply 9):
as the next big step would be to leave Venezuela completely, like other major carriers did. And that is a big bet wether they actually think the actual government is or is not going to last.

Indeed.

Quoting yv773p (Reply 10):
but maybe having tickets sold at SICADII dampened demand.

SICAD2 for air tickets is effective July 1st. Current prices in Bolivares are already sky-high (i.e. a ticket to Miami can cost you 100x the monthly minimum wage). The thing is that, since late 2013, it's almost impossible to buy tickets in Bolivares.

Quoting 2travel2know2 (Reply 11):
Wonder if AA downsizing its Venezuela operations will see an increase on its passenger demand out of AUA, CUR and POS for those Venezuelan passengers who can afford to travel to those airports when flying to/from The States.

I highly doubt it. There's already extremely limited capacity in AUA, CUR and POS operations by both local and island carriers. There's no way that they can absorb the amount of seats that AA has withdrawn from the Venezuelan market.

On the other hand, it would be interesting to monitor Copa's PTY operations to CUC. You might start seeing increased demand from CUC. CUC is accesible by road, just a couple of minutes away from the Venezuelan border.

Saludos,
Luis
 
luisde8cd
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 3:47 pm

Quoting Miami (Reply 12):
Bad news for my family. Guess they need to travel with LAN or SBA.

LAN announced that they are "temporarily" suspending their SCL-CCS-MIA flights in July. However, that's the same announcement that Alitalia made and then they simply never decided to restart the flights.

Your best bet is SBA and Avior (to BLA) as long as they are allowed by US authorities to continue flying into MIA.

Saludos,
Luis
 
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cybergus
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 3:49 pm

Quoting Miami (Reply 12):
Bad news for my family. Guess they need to travel with LAN or SBA.

Bad news for all our families...my dad visited me last week and he could only found a ticket in SBA. Sales are suspended in AA and don't hold your breath to LAN as they are suspending the route next month for some dates. All the Venezuelan community here in Miami are being left with fewer options.

You can tell the impact already, just by going to the Dolphin Mall and not seeing the same amount of Venezuelans as before.

Cheers

Tavo
LAN Excellence in Flight
 
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Miami
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 4:05 pm

Quoting luisde8cd (Reply 15):
LAN announced that they are "temporarily" suspending their SCL-CCS-MIA flights in July.

Just got the story. Even worse..

http://centreforaviation.com/news/la...s-miami-service-in-jul-2014-345646
Aviation is proof that given, the will, we have the capacity to achieve the impossible. - Eddie Rickenbacker
 
bobnwa
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 4:14 pm

Quoting Jetblue1965 (Reply 3):
I wonder how this is going to be spinned.

Obviously it will be spinned as AA reducing service because Venezuela owes them 700 million dollars. How else could it be spinned
 
jetblue1965
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 4:23 pm

Quoting bobnwa (Reply 18):

Why are u quoting me ? None of those words were from my post
 
usflyer msp
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 4:26 pm

Quoting bobnwa (Reply 18):
Obviously it will be spinned as AA reducing service because Venezuela owes them 700 million dollars. How else could it be spinned

Never underestimate the creativity of the Venezuelan government....
 
OB1504
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 4:39 pm

Quoting yv773p (Reply 5):
What are the LFs right now?

Load factors don't matter if the airline doesn't get the money.
 
max999
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 4:42 pm

Quoting luisde8cd (Thread starter):
Due to the $750 million that the Venezuelan govt. owes to AA, for its ticket sales in local currency, AA has decided to cut the following routes from CCS: JFK, DFW and SJU.

Just a guess here...but could this be AA's new management deciding to stop tolerating the losses and move on? Perhaps the old management decided to stay despite the cash problems, but the new management has decided maintaining this market isn't worth it?
All the things I really like to do are either immoral, illegal, or fattening.
 
roseflyer
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 4:55 pm

This is a huge drop. I expect some bitter words from Venezuela authorities. For those buying tickets in US dollars, MIA-CCS has about the highest cost per mile of any flight in economy class. Roundtrip tickets of $2000 are not abnormal for such a short flight. Unfortunately I think (someone please confirm) that laws require AA to sell some of the tickets within Venezuela and for these there is not repatriation of funds.

Venezuela pid a few airlines a couple weeks ago. I think aa is the biggest creditor and didn't see anything.
If you have never designed an airplane part before, let the real designers do the work!
 
AR385
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 5:06 pm

Will this help AM? I suppose that now that they were paid, they will have no issue with frequencies and might even upgauge again to a 762/3

Venezuelans can fly to MEX and then connect to their final destinations in the US. Bit of a detour but what are the other options currently?

AR to MIA
Gol

I don´t think tickets would be easy to get from the Caribbean airlines.
 
usflyer msp
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 5:06 pm

Good for AA. The only thing I worry about is whether, knowing how Caracas works, AA will be able to restart these routes should Venezuela ever fix itself...
 
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par13del
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 5:15 pm

Quoting westindian425 (Reply 8):
For a country to owe you over $750 million dollars, I'd doubt the issue is load factor or airframes for downgrade.

How does a professionally run business allow a customer to run up such a high receivable, that should demand a explanation all the way up to the board, but since AA went chpt.11 I guess those persons are long gone.
Which raises another issue, should chpt.11 allow the writing off of receivables as it does for some payables?
 
MesaFlyGuy
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 5:19 pm

Quoting Jetblue1965 (Reply 19):

That's a common glitch with the forums. I don't think he did it intentionally.
The views I express are my own and do not reflect the views and opinions of my company.
 
blueflyer
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 5:46 pm

Quoting bobnwa (Reply 18):
Obviously it will be spinned as AA reducing service because Venezuela owes them 700 million dollars. How else could it be spinned

The same way it was spinned last time: foreign airiness are cutting flights to Venezuela in order to increase service to Brazil for the World Cup (no joke).

The Venezuelan government is not about to admit they can't pay their bills to their own citizens. The cuts must be reported in a way that absolves the government of any blame, at least as far as their domestic audience is concerned.
 
Bobloblaw
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 6:08 pm

Venezuela is an idiocracy. Followed closely by Argentina
 
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diverdave
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 6:24 pm

Many of the flights out of Venezuela have been loaded with folks who were flying out of the country in order to exchange bolivars for dollars at the official exchange rate. Very profitable while it lasted:

http://www.usatoday.com/story/news/w...3/10/21/venezuela-flights/3012803/

David
 
solarflyer22
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 6:39 pm

Quoting westindian425 (Reply 8):
For a country to owe you over $750 million dollars, I'd doubt the issue is load factor or airframes for downgrade. That is a serious amount. I don't understand why Venezuela would owe airlines close to $3.6 billion!

Yeah, I mean it was 500 m 6 months ago so it makes sense. I am glad they did this and it will really hit home hard the point of how the nation is falling apart. When you lose air service, you lose a lifeline to the outside world. I do think its smart to cut back and not cancel outright. You want to be in position to keep your foothold in the country.
 
2travel2know2
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 6:54 pm

Quoting luisde8cd (Reply 14):
On the other hand, it would be interesting to monitor Copa's PTY operations to CUC. You might start seeing increased demand from CUC. CUC is accesible by road, just a couple of minutes away from the Venezuelan border.

Then CM should look into flying PTY-SMR-PTY too so to have passengers from MAR travel by land to/from SMR in order to fly CM.
I'm not on CM's payroll.
 
MAH4546
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 7:41 pm

How easy/difficult/cheap/expensive is it to cross the border into Venezuela by land or boat?

This could lead to a surge of demand for border airports like AUC and CUR.
a.
 
uberflieger
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 7:49 pm

Quoting Mah4546 (Reply 39):
This could lead to a surge of demand for border airports

  
Most definitely and most likely it will be places people fly to, because the roads have become extremely dangerous.
 
777STL
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 7:52 pm

Quoting Jetblue1965 (Reply 3):
At what point are they required to move these trapped funds from "accounts receivables" into "write off" ?

According to US GAAP, any regular debt older than 90 days(with extenutating circumstances) should be written off as an expense.
PHX based
 
realsim
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 7:54 pm

Quoting Mah4546 (Reply 39):
This could lead to a surge of demand for border airports like AUC and CUR.

Before AUC, I could see CUC, SMR and VUP. The big question for me is, however, whether AA will be able to resume the dropped routes. I'm really surprised, in this regard, that they have axed SJU-CCS instead of reducing it two 1 or 2 weekly flights, like they will do with MAR.
 
jetblue1965
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 7:58 pm

Quoting Mah4546 (Reply 39):
This could lead to a surge of demand for border airports like AUC and CUR.

CCS-AUC is 353mi great circle. The best bullet trains on earth (discounting Maglev) will need 2.5-3.5 hours to make that journey if it's a straight line (with some stops along the way). With Venezuelan infrastructure, more like 8-10 hours at the bare minimum.

CCS-CUR is 172mi / 150nm great circle. That's a LOT of hours even on a speedboat.
 
jfk777
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 8:08 pm

This is a sad statement on the state of affairs in Caracas. AA has contributed billions of dollars to the economy of Venezuela since they took over the routes from Eastern and this happens to them. If I were AA I would stop flting to Caracas period.
 
uberflieger
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 8:23 pm

Quoting jfk777 (Reply 45):
I would stop flting to Caracas period

American has done their homework. They will sell tickets in the US only at exorbitant prices and start recouping some of the money. Anybody wanna guess the airfare CCS-MIA for July or August?  
 
SCL767
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 8:30 pm

Quoting luisde8cd (Reply 15):
LAN announced that they are "temporarily" suspending their SCL-CCS-MIA flights in July.

According to LAN, "Due to a commercial definition, between July 14 and 31, 2014 LAN will temporarily suspend its operation on flights LA568/LA569 of the route Santiago (SCL) - Guayaquil (GYE) - Caracas (CCS) - Miami (MIA) and LA560/LA561 in the Santiago (SCL) - Caracas (CCS) - Miami (MIA) route." However the SCL-GYE sector on LA568 is still bookable. Perhaps LAN will operate SCL-GYE-MIA-GYE-SCL 2x weekly...
 
yv773p
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 8:30 pm

Quoting 777stl (Reply 42):
any regular debt older than 90 days

I don't think this is debt but rather cash. They have the cash in bolivares but they can't get out in dollars.

It is part of their cash balances this from their 10-Q:
"As of March 31, 2014, approximately $750 million of the Company’s unrestricted cash balance was held in Venezuelan bolivars, valued at the weighted average applicable exchange rate of 6.32 bolivars to the dollar. This includes approximately $94 million valued at 4.3 bolivars, approximately $611 million valued at 6.3 bolivars, and approximately $45 million valued at 10.7 bolivars..."

[Edited 2014-06-17 14:30:50]
Even the lazy jellyfish do it!
 
peterinlisbon
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 8:51 pm

LOL idiocracy. You know a country is going down the tube when airlines start cancelling air services. It severs their last link with the outside world.
 
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par13del
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 9:02 pm

Quoting ScottB (Reply 40):
The Venezuelan Government (or I think, more specifically, the Central Bank) isn't a customer in this situation. AA holds $750 billion in bolivares which are legal tender in Venezuela and, I believe, actually holds the authorization to convert those funds into dollars.

Without knowing the specifics I would assume that AA over the years would remit funds out the country in US Dollars on a periodic basis, this is where I think the problem lies, it should never have been allowed to reach the current massive amount.
If remittance was done quarterly for example, after two missed quarters of no Central Bank approval, something should have been done.
I accept that government pressure and promises would have been given, but I'm thinking AA should have had a lower cut-off point.
 
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lightsaber
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 10:13 pm

Quoting realsim (Reply 43):
The big question for me is, however, whether AA will be able to resume the dropped routes. I'm really surprised, in this regard, that they have axed SJU-CCS instead of reducing it two 1 or 2 weekly flights, like they will do with MAR.

What a threat... Not. Venezuela would have *no* chance of economic recovery if they follow through with their threats. One needs transportation to build wealth.

Quoting Jetblue1965 (Reply 44):
CCS-AUC is 353mi great circle. The best bullet trains on earth (discounting Maglev) will need 2.5-3.5 hours to make that journey if it's a straight line (with some stops along the way). With Venezuelan infrastructure, more like 8-10 hours at the bare minimum.

Then that is what people will have to do for travel.

Quoting uberflieger (Reply 46):
Anybody wanna guess the airfare CCS-MIA for July or August?

We need a Dr. Evil smilie to represent "One MILLION dollars!"

Quoting par13del (Reply 50):
Without knowing the specifics I would assume that AA over the years would remit funds out the country in US Dollars on a periodic basis, this is where I think the problem lies, it should never have been allowed to reach the current massive amount.
If remittance was done quarterly for example, after two missed quarters of no Central Bank approval, something should have been done.

They are in arrears for 2012 and 2013. I too am surprised they didn't cut earlier... but perhaps the US side was profitable. Venezuela's economy is really falling apart. Perhaps the demand dropped from the USA?

Quoting peterinlisbon (Reply 49):

LOL idiocracy. You know a country is going down the tube when airlines start cancelling air services. It severs their last link with the outside world.

   Air service is a sign of economic health...


Lightsaber
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bchandl
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 10:40 pm

Quoting A388 (Reply 2):

Very sad news and I feel for the Venezuelan travelers who will be affected by fewer options to travel to/from the country. Hopefully this will be resolved soon.

It's really quite simple.

The Government needs to start paying airlines they're owed with the money they don't have.      
 
SCL767
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 10:53 pm

 
QANTAS747-438
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 10:58 pm

What is the simplified version of what Venezuela is doing to the airlines?
My posts/replies are strictly my opinion and not that of any company, organization, or Southwest Airlines.
 
Avianca
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RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 10:58 pm

this is converting into a nightmare...

if the goverment is not paying within the next weeks, for the winter timetable most carriers will pull out of Venezuela!
Colombia es el Mundo Y el Mundo es Colombia
 
Venezuela747
Posts: 1378
Joined: Thu Jan 01, 2004 9:36 am

RE: AA Downsizes Venezuelan Ops From 48x To 10x Weekly

Tue Jun 17, 2014 11:09 pm

Quoting QANTAS747-438 (Reply 54):

Essentially Venezuelan's bought airline tickets at an exchange rate of 6 BsF to 1 USD, with the promise that the government would exchange that money the airlines would get at that rate. So now the country is refusing for whatever reason, or claim that they are slowly doing it... recently they said they would be exchanging at a 11 to 1 rate.

So if you're AA, say you sold a ticket that was priced at $1000 for 6000BsF with the hope the government would change it. Now the government is not really wanting to exchange and if they do they are going to do it at an 11 to 1 rate, thus AA only getting $545.

This is why so many airlines have been leaving or downgrading, to stop the bleeding. Many will just downgrade instead of completely leave since the government has sworn to not allow any airline back that stops flying to CCS
ROLL TIDE!!!

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