Delta Air Lines (NYSE: DAL) said on Monday that it is cutting service to Venezuela from one flight per day between Atlanta and Caracas to one flight per week. American Airlines Group Inc. (NASDAQ: AAL) cut its service from 48 weekly flights to just 10.
The Venezuelan government has refused to allow the airlines to convert their local ticket sales revenues to U.S. dollars at the exchange rate in force when the revenues were earned. Venezuelan authorities reportedly want to make the make the conversion to dollars more expensive. According to the International Air Transport Association (IATA), at the end of April Venezuela was withholding repatriation of about $4 billion of airlines funds. American Airlines said in June it was owed $750 million through the end of March.
Air Canada has suspended all service to Venezuela and other airlines such as Lufthansa have lowered the number of tickets that will be sold in local currency. The IATA said in April that 11 of 24 airlines that once served Venezuela have reduced service to the country by between 15% and 78%.
Delta’s shares are trading down about 4.7% on Monday afternoon at $36.77 in a 52-week range of $18.45 to $42.66. Delta’s stock had risen nearly 40% from the beginning of the year through the end of last week and has doubled over the past 12 months. The 52-week high was set in early June and shares have lost 10% since then.
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