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Lufthansa halting flights to Venezuela amid crisis

How did Venezuela get into such deep debt?
How did Venezuela get into such deep debt?

Another sign of deep trouble in Venezuela: Lufthansa, one of Europe’s largest airlines, said it will stop flying to the country. The company announced Sunday that beginning June 17, it will suspend flights indefinitely to Venezuela, which is grappling with a daunting economic and humanitarian crisis.

Andreas Bartles, a Lufthansa spokesperson, said there’s two reasons for the decision. First, there simply isn’t enough demand — particularly among business travelers — to fill flights. Second, the company is having trouble converting Venezuelan currency, which uses complicated multi-tiered exchange rates.

Venezuela is heavily reliant on its massive oil reserves, and two years of stubbornly low oil prices have strangled the country’s economy.

Related: Venezuela: the land of 500% inflation

And fewer flights on Venezuelan runways is far from the country’s only problem. The economic crisis has spurred food rationing, medicine shortages, and mass unemployment. The International Monetary Fund expects unemployment to hit a staggering 21% next year.

The government has ordered rolling blackouts to conserve power, and employees in the public sector are working only two days a week.

The downward spiral has caused concern for many international companies. Last year, multiple air carriers — including U.S.-based Delt (DAL)and American Airline a(AAL)s well as Air Canada and Europe-based Alitalia — made plans to reduce or suspend Venezuelan flights.

Related: How much more oil can the Saudis really pump?

Coca-Cola(KO) also recently announced that it is temporarily stopping production in the country amid a sugar shortage.

Andreas Bartles, a Lufthansa spokesperson, said there’s two reasons for the decision. First, there simply isn’t enough demand — particularly among business travelers — to fill flights. Second, the company is having trouble converting Venezuelan currency, which uses complicated multi-tiered exchange rates.

Venezuela is heavily reliant on its massive oil reserves, and two years of stubbornly low oil prices have strangled the country’s economy.

Related: Venezuela: the land of 500% inflation

And fewer flights on Venezuelan runways is far from the country’s only problem. The economic crisis has spurred food rationing, medicine shortages, and mass unemployment. The International Monetary Fund expects unemployment to hit a staggering 21% next year.

The government has ordered rolling blackouts to conserve power, and employees in the public sector are working only two days a week.

The downward spiral has caused concern for many international companies. Last year, multiple air carriers — including U.S.-based Delta(DAL) and American Airlines(AAL) as well as Air Canada and Europe-based Alitalia — made plans to reduce or suspend Venezuelan flights.

Related: How much more oil can the Saudis really pump?

Coca-Cola(KO) also recently announced that it is temporarily stopping production in the country amid a sugar shortage.

CNNMoney (New York) First published May 29, 2016: 3:21 PM ET

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