American Airlines To Pull Out Of Paraguay

December 16, 2005

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American Airlines plans to cancel its flights to Paraguay indefinitely after 15 years because the route is no longer profitable, a company spokeswoman said on Friday.

As of February 2, Paraguay's Asuncion will become the only South American capital the carrier does not fly to.

In a phone interview from Miami, spokeswoman Marta Pantin denied the company is leaving because of a new law in Paraguay giving travel agencies a 6 percent commission on the sale of air tickets, as reported in local media. She said the carrier planned no other cuts in the region.

Paraguay's civil aviation chief Tomas Bittar said the government had not received official notice of the airline's decision, but would be "very hurt" by such a move.

"We will take the steps necessary to remedy this situation," he said.

Pantin said: "We are always open to dialogue, but at this time this is not a profitable route."

American Airlines flies daily from Asuncion to Brazil's Sao Paulo. Its competitors in Paraguay are Brazilian carriers Varig and TAM. GOL, also Brazilian, will begin servicing the Asuncion-Sao Paulo route in the next few days, Bittar said.

American Airlines operates more than 200 daily flights in Latin America and the Caribbean.

(Reuters)