UPDATE 1-Venezuela owes Copa Airlines $500 mln - CEO
By Daniel Bases
NEW YORK May 30 (Reuters) - Copa Airlines said on Friday the Venezuelan government owes it approximately $500 million in unrepatriated revenue, approximately 12 percent of what the local airline association says is owed to airlines because of currency controls.
On Friday Venezuela said it will begin releasing $2.1 billion in hard currency to companies that have struggled to obtain greenbacks as a result of the controls. Airlines are expected to see a $486 million disbursement.
Speaking just before the government's announcement, Pedro Heilbron, the chief executive officer of Copa's parent Company Copa Holdings, said the dispute has resulted in drastic cutback in seat capacity for its Venezuelan operations.
"By July 1st we will have reduced around 40 percent of our seat offering into Venezuela, both from Panama and from Colombia," Heilbron told Reuters before meeting investors in New York.
"That will take us to a point where the risk of accumulating Venezuelan currency, Bolivars, will be minimal," he said.
Venezuela's local airline industry association said on Thursday that 24 international airlines have an estimated $4.2 billion trapped in the country due to currency controls.
The Venezuelan government requires airlines to sell tickets in the local bolivar currency, but has been slow to allow repatriation of funds under strict foreign currency controls. Continuación...