Leading Bolivian Airline Halts All Flights Due to Financial Woes

Amaszonas, Bolivia’s major airline, has paused all flights. The country’s civil aviation authority, DGAC, canceled the registration of four of the company’s planes.

This happened because of unpaid leasing fees, racking up debts over US$17 million. In response, Amaszonas said it had to stop flights, stranding many travelers.

A court in Bolivia sided with Amaszonas, lifting the hold on plane registration. Yet, DGAC refused to follow the court’s order.

They say they’ll keep their stand until a valid leasing contract is in place.

CEO Dardo García says DGAC’s actions are illegal. He blames the government for passenger inconvenience.

“They’ll have to answer for this,” he stated. On the other hand, the government urges the airline to solve the issue.

It even suggests leasing other aircraft. The airline is also in a dispute with GY Aviation Lease 1816 Co., a supplier.

The government’s advice: lease new planes if you want to fix this problem.

Background

Amaszonas was a significant player in Bolivia’s aviation industry. Its halt in operations has a ripple effect on the country’s transportation and tourism sectors.

The company’s financial troubles aren’t unique; many airlines are facing similar challenges, especially after the economic impact of the pandemic.

However, the situation for Amaszonas is dire given its role as Bolivia’s major airline.

The DGAC’s decision to cancel plane registration over unpaid fees is a strict but common measure.

Airlines usually lease aircraft from third-party companies. In this case, Amaszonas couldn’t meet its payment obligations with GY Aviation Lease 1816 Co., its supplier.

While the court sided with Amaszonas, DGAC’s refusal to obey is rare, sparking debate about the judiciary’s power in Bolivia.

CEO Dardo García’s assertion that the authority’s action is illegal adds fuel to this discussion.

It questions the checks and balances within Bolivian governance.