MercoPress. South Atlantic News Agency

American Airlines axes Caracas New-York until market conditions improve

In January the Forth Worth-based company wrote off $592 million, stuck in Venezuela due to the government's failure to exchange it for hard currency.

American Airlines said this week it will ax its Caracas to New York route on April 4 due to low demand just over three months after reinstating it. The surprise move comes amid a years-long battle between American Airlines Group and the Venezuelan government in which the world's largest airline says it has not been able to repatriate revenue.

 In January, the Forth Worth-based company wrote off $592 million which it said was stuck in Venezuela due to the government's failure to exchange it for hard currency.

President Nicolas Maduro's cash-squeezed government has said it is negotiating solutions.

“We are suspending service on the JFK-Caracas route until market conditions improve,” said Martha Pantin, a spokeswoman for the airline. “This suspension is due to demand not being strong enough to support this route.”

Since reinstating the flight in December, many seats have remained unfilled except around holiday periods.

Caracas was American's first South American destination nearly 30 years ago and a major hotspot for business and tourism. The supersonic Concorde jet used to fly to its main international airport.

Now that airport is described by pilots as a “graveyard” as Venezuela undergoes a severe economic crisis and recession, which has hit tourism and business.

Many airlines have reduced routes in recent years saying they were collectively owed several billion dollars in revenue for tickets sold in the local Bolivar currency. Under strict currency controls, they were unable to exchange a lot of their Bolivars for hard currency at favorable exchange rates.

American slashed 80% of its flights two years ago though reinstated the route between Caracas' Maiquetia and New York's John F. Kennedy airports in December. The flights were priced in U.S. dollars, which put them out of reach for many Venezuelans amid the national economic crisis. However the airline continues to run two daily flights to Caracas from Miami.