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American Airlines stops accepting payments in Argentine pesos

Published 11/25/2015, 10:55 AM
Updated 11/25/2015, 11:21 AM
© Reuters. An Argentine 100 pesos bank note is displayed next to the a U.S. 100 dollar note in Buenos Aires
AAL
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By Hugh Bronstein

BUENOS AIRES (Reuters) - American Airlines (O:AAL) has stopped accepting Argentine pesos to pay for tickets due to currency controls that make it hard to convert receipts into U.S. dollars, local media and one of the airline's sales agents said on Wednesday.

"That's the policy at this moment. It started two days ago," said an American Airlines sales agent contacted by Reuters.

A local spokesman for the airline, the world's largest, could not be reached immediately for comment.

Businesses have long complained about difficulty in accessing the currency exchange market in Argentina due to policies enacted by leftist President Cristina Fernandez, who will step down on Dec. 10 after two terms in office.

Conservative opposition candidate Mauricio Macri won Sunday's presidential election, promising to ditch trade and currency controls as part of a program of free-market reforms welcomed by big business.

Asked how long the prohibition, which includes cash and credit and debit card payments in pesos, would last, the American Airlines ticket agent said, "We don't know."

American Airlines, however, will continue accepting payments from customers in Argentina made on foreign credit cards, the agent said. Local media reported that ticket sales made before the airline's prohibition on Argentine cards would be honored.

The situation mirrors that 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 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, chief executive officer of the International Air Transport Association (IATA), said in a speech in Puerto Rico this month.

The IATA, which is the trade association for the world's airlines, 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 JP Morgan, is to be Macri's finance minister.

© Reuters. An Argentine 100 pesos bank note is displayed next to the a U.S. 100 dollar note in Buenos Aires

Argentina's official peso was at 9.675 per dollar on Wednesday, 57.3 percent stronger than the black market rate at which many transactions in Argentina are made. Under Fernandez, the central bank intervenes to keep the official rate strong. Macri says he will allow the two rates to converge.

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