Currency crisis in Argentina hits airlines; Flybondi suspends flights

Argentina’s low-cost airline flybondi announced this Tuesday the cancellation of at least 22 flights for not having authorization from the Government to transfer payments in dollars abroad and not being able to lease two of the planes for its fleet, in the midst of the foreign exchange shortage that drags the South American country.

Through a statement to its passengers, Flybondi explained that it has to “stop operating a minor part” of his fleet andcancel 22 flights”, as well as operational adjustments that imply changes of “10 flight schedule”.

The airline indicated in a press release that the cancellations and schedule modifications will affect 5,500 passengers between June 7 and 9.

“Currently, there are official measures that are restrictive for companies that need access to foreign currency to make payments abroad. At Flybondi we hire several specialized services outside and that are paid in dollars. In order to do so we must request authorization periodically, but in the last two months we have not received the approvals”, explained the company in the statement to the passengers.

“We were accumulating defaults in payments and the most critical is the aircraft lease”, said the company, which began operating five years ago, has 21% of the Argentine domestic market share and transports 300,000 people per month.

flybondi pointed out that the lack of authorization to transfer payments abroad for services forces her to leave two planes on the ground, since “non-compliance with payments impacts the lease of the aircraft and the operation”.

And it does not rule outnew cancellations and delays in the service if the situation does not return to normal”.

The Ministry of Economy restricts authorizations and the Central Bank of Argentina the delivery of foreign currency to pay for imports of goods and services due to the scarcity of international reserves, which results in a lack of inputs or difficulties in paying for services and in the proliferation of parallel exchange rates in the financial and informal markets.

Source: EFE