The Canadian Press - ONLINE EDITION

American Airlines will cut most flights to Venezuela as dispute over revenue simmers

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FORT WORTH, Texas - American Airlines said Tuesday that it will cut nearly 80 per cent of its flights to Venezuela in a dispute over revenue being held by the South American country.

American said that beginning July 2 it will operate 10 flights per week instead of the current 48. And it will only fly to Venezuela from Miami, scrapping flights from New York, Dallas and San Juan, Puerto Rico.

The airline says Venezuela is holding on to at least $750 million in revenue that American wants to bring back to the U.S.

Other airlines are locked in similar disputes. The International Air Transport Association, a trade group for major world airlines, said this month that Venezuela is holding $4 billion in airline money because of problems with the country's currency-control system.

Air Canada and Italy's Alitalia have suspended all flights to Caracas and Panama's Copa has reduced service. Several U.S. airlines have also restricted sales there because of the socialist government's refusal to turn over money from sales inside Venezuela.

Last month, the government announced a deal that would let six Latin American airlines including Colombia's Avianca and AeroMexico to repatriate revenue from sales in 2012 and 2013.

Other industries such as drug companies and carmakers have also run into difficulty getting dollars from the government's tightly managed currency system because of a shortage of U.S. dollars.

American has a broad network of flights to Latin America and has flown to Venezuela for nearly 27 years. A spokesman for Fort Worth-based American Airlines Group Inc., Casey Norton, said that American values "our business and longstanding relationships with the government." But, he said, the airline is cutting flights because it is owed $750 million in ticket revenue through March and hasn't been able to resolve the dispute.

"We continue to work with the government of Venezuela on this matter," Norton said.

American currently flies four times per day between Caracas and Miami, once a day between Caracas and San Juan, once a day between Maracaibo and Miami, five times per week between Caracas and New York's Kennedy Airport, and once a week between Caracas and Dallas-Fort Worth International Airport.

Beginning July 2, American said, it will fly daily between Caracas and Miami with an extra flight on Saturdays, and two flights per week between Maracaibo and Miami.

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