Brazil's GOL Suspends Flights to Caracas, Venezuela

MIAMI — Brazilian carrier GOL has suspended its Sao Paulo - Caracas flight, due to the impossibility to settle repatriated funds in foreign currency, arising from the sale of passenger tickets and cargo space during 2013 and 2014 in Venezuela, and after the notification of local authorities of charging airport services, taxes and fuel in U.S. Dollars to foreign carriers serving the Latin American country.During the last three years, the retrieval of the income from Venezuela has been impossible. Airlines such as Air Canada and Alitalia opted to suspend their flights to Caracas, while others have drastically reduced their frequencies or closed routes, such as American and Delta Air Lines, which decided to write-off their remaining cash in Bolivars, totaling $592 million and $75 million, respectively, in the fourth quarter of 2015.These measures are intended to decrease the exposure to risk of foreign carriers serving Venezuela, given the unstable, economic, political and social conditions of the country, and the measures that Nicolas Maduro's government may eventually take (especially in the matter of foreign exchange policies).Last year, GOL dropped its Aruba and Punta Cana flights to Caracas, routes exploited under 5th freedom traffic rights, and limited to a weekly service its Sao Paulo - Caracas route. At that time, the airline warned about the possibility of putting the operations to an end.Despite the attempts of the Brazilian government to solve the situation by bringing the topic to diplomatic levels, negotiations never came to a fruition.Last June, during the Annual General Meeting of IATA in Miami, Peter Cerda, IATA’s Regional Vice President, admitted that the Association didn't have any relevant progress in the negotiations so far and that IATA would not expect to see any progress in at least the coming two years.In the meantime, seat availability and frequencies for traveling overseas from Venezuela are limited. Venezuelans are facing a myriad of obstacles for traveling, namely the unavailability of tickets, blocking of travel dates, additional surcharges and commercialization of tickets in foreign currency.