BUENOS AIRES (Reuters) - American Airlines (AAL.O) has stopped accepting Argentine pesos to pay for tickets due to currency controls that make it hard to convert receipts into U.S. dollars, the carrier said on Wednesday.
Foreign businesses operating in Argentina have long complained that they cannot send their profits home due to protectionist controls enacted by President Cristina Fernandez, who will step down on Dec. 10 after two terms in office.
“We have not reduced our flights, although we currently do not have inventory available for purchase in Argentine pesos due to repatriation issues,” American Airlines said in a statement.
The business-friendly mayor of Buenos Aires, Mauricio Macri, won Sunday’s presidential election against a candidate from Fernandez’s party. Macri vows to ditch Fernandez’s currency and trade controls as part of his push toward free markets.
“We look forward to working with the central bank and the new government on this matter,” American Airlines said in a statement.
The airline operates 27 flights per week from Buenos Aires to the United States, increasing to 35 weekly in high season.
The situation mirrors the one in Venezuela, where airlines have about $3.7 billion in ticket sales trapped because of the socialist nation’s 12-year-old currency control system, the International Air Transport Association (IATA) said in June.
“There is a risk that Argentina is headed down the same path as Venezuela. Both countries top a list of misguided policies and decisions that we are engaging governments across the region to reverse,” Tony Tyler, IATA’s chief executive officer, said in a speech in Puerto Rico this month.
IATA, the trade association for about 260 airlines around the world, would like to talk about policy changes with Macri.
“We are seeking to meet the new government as soon as it is in office to find a solution that will preserve connectivity and the vital economic benefits it brings,” Tyler said.
Alfonso Prat-Gay, a former foreign exchange chief at JPMorgan (JPM.N), is to be Macri’s finance minister.
Argentina’s official peso ARS=RASL was at 9.675 per dollar on Wednesday, 57.3 percent stronger than the black market rate at which many local transactions are made.
Under Fernandez, the central bank intervenes to keep the official rate strong. Macri says he will allow the two rates to converge.
American Airlines Group Inc shares dipped 3 cents to $41.20.
Additional reporting by Alexandra Ulmer in Caracas and Jorge Otaola in Buenos Aires; Editing by Paul Simao, Bill Trott and Jeffrey Benkoe