US/Venezuela: Airlines ask permission to break antitrust law

Airlines have a question for US regulators: Mind if we collude a bit?

The carriers have made an unusual request of the US Department of Transportation: They want antitrust immunity for one year so they can collectively discuss ways to retrieve $3.8 billion currently held hostage by Venezuela’s deep economic slide.

Since 2013, Venezuelan officials have virtually halted the repatriation of past ticket sales made in bolivars, the local currency. Inflation has soared and foreign currency reserves have dwindled to $12 billion, as the government of President Nicolás Maduro imposed various currency exchange rates and the economy fell into disarray andfood shortages. As a result, the flow of money homeward has slowed to a trickle for many multinational corporations operating in Venezuela.

Authorities first required government approval for the repatriation of foreign company sales in 2003. Over the past 21 months, Maduro’s government allowed only two small payments to a pair of foreign carriers, said Jason Sinclair, a spokesman for the International Air Transport Association. Airlines that previously negotiated for payment individually are now hoping a united front can offer more leverage.

“Individual airline approaches to the Venezuelan government thus far have been unavailing,” IATA’s general counsel, Jeffrey Shane, wrote in a Sept. 22 filing with the DOT. Antitrust immunity “would permit the airlines to consider approaches to the problem, which they have not been permitted to explore together before now.”

US airlines are particularly sensitive to antitrust concerns as the Department of Justice began an inquiry more than a year ago into whether they had colluded on pricing through their comments about the industry’s capacity discipline.

Full Content: Bloomberg

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