American Writes Off Cash Trapped In Venezuela

American Airlines has written off more than half a billion dollars in revenue stuck in Venezuela because of currency controls.

American said it will include a USD$592 million special charge in the just-ended fourth quarter "due to continued lack of repatriations and deterioration of economic conditions in Venezuela."

The South American country had compelled carriers to sell tickets in bolivars but made converting the sales into US dollars difficult. Globally, airlines have around USD$3.7 billion trapped in Venezuela as a result of its 12 year currency control system, IATA said in June.

American also said it continues to expect a pre-tax margin between 12 and 14 percent for the fourth quarter, excluding special items. It continues to expect that passenger unit revenue fell by between 5 and 7 percent in the quarter from a year earlier.

United said on Monday its passenger unit revenue may have fallen more than expected in the fourth quarter, raising the possibility of more turbulence for US carriers, after months of heightened competition with low-cost rivals and weaker demand from abroad because of the strong dollar.

American said it has moved USD$2.9 billion of tax allowances - generated from years of losses prior to its 2013 merger with US Airways - to its income statement because it expects to be profitable "on a sustained basis."