American Airlines on Tuesday said it would take a $592 million write-off in its fourth quarter on the Venezuelan currency it holds due to the continued economic deterioration in that country. The Fort Worth, Texas-based airline is the latest multinational company to be affected by the fall in the bolivar, which is down sharply against the U.S. dollar this year, according to The Wall Street Journal.
A Reuters article said that the South American country’s socialist government had compelled carriers to sell tickets in bolivars but made reconverting the sales into U.S. dollars difficult. Globally, airlines have around $3.7 billion trapped in Venezuela as a result of its 12-year-old currency control system, according to the International Air Transport Association.
American, which became the world’s largest airline by traffic after merging with US Airways in 2013, also said passenger traffic rose 1.5% in December. The company said that while total capacity was flat, load factor — the percentage of seats filled — increased to 81.6% from 80.4% a year ago.
The company said continues to expect a pre-tax margin between 12% and 14% for the fourth quarter, excluding special items. It continues to expect that passenger unit revenue fell between 5% and 7% in the quarter from a year earlier.
As of December 31, American said, it had $6.9 billion in total cash and short-term investments, of which $695 million was restricted. The company also has an undrawn revolver of $2.4 billion.