Avensa's financial condition has forced it to suspend all flights to Europe. The Venezuelan airline returned its two McDonnell Douglas DC-10s to their lessor in early February. By some accounts the lessor seized them, but Avensa insists it returned the jets as their leases expired.

Either way, this is a major setback for Avensa, the only Venezuelan airline flying to Europe. Two years ago it fought a legal battle with an earlier Caracas government over its right to European routes. After winning that battle it launched flights a year ago to Lisbon, Oporto, Madrid, Rome and Milan.

The carrier has been plagued by poor performance and a shortage of capital, a situation worsened when AeroPeru went bankrupt last year owing Avensa substantial sums. Creditors have considered forcing Avensa into bankruptcy, but are waiting to see if it can restructure on its own. Jeffrey Stern, Avensa's director for Chile and Peru, confirms that Citicorp recently agreed to capitalise $23 million of Avensa's debts.

Source: Airline Business