The big drop over the past year in oil prices has been a boon to bargain-seeking air travelers, but has devastated economies that depend heavily on oil revenue. And that, in turn, has led to cancellation of flights to a number of countries.
The latest is LATAM's dropping of flights to and from Venezuela, which is one of the countries hardest-hit by the downward spiral of oil prices. In order to keep its supply of "hard" currencies, such as U.S. dollars and Euros, it's limited their export, meaning that airlines can't take their earnings home.
LATAM, formed by the merger of LAN Chile and TAM of Brazil, is South America's largest airline. Its expenses for staff, facilities and fees in Venezuela are much lower than its income there; in essence, its earnings are trapped. That situation previously led American Airlines and others to drop the country from their networks. American wrote off nearly half a billion in profits on its books.
Similarly, United has just ended its last service to Nigeria, another country hurt by low oil prices and limiting export of hard currency. Egypt is also on the airlines' warning list, and others could follow.
For more details on the LATAM move from USA Today, click HERE
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