American Airlines has stopped accepting payments in Argentine pesos. This decision the result of Argentine government’s currency controls that make it difficult to convert pesos into dollars to repatriate earnings. The constraints on buying dollars have been becoming untenable for a while. American Airlines “had been limiting its Argentine peso holdings since September, by selling in pesos only business-class tickets or tickets on flights operating in the next rolling 90-day period,” reported the Wall Street Journal.
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Thus, given this economic climate, American Airlines and other airlines operating in Argentina may wish to start taking payments in the borderless, cryptocurrency Bitcoin. Moreover, bitcoins are easily convertible into dollars or any other fiat currency. Indeed, a few airlines around the world are already accepting payments with bitcoins.
American Airlines is the biggest U.S. carrier servicing Argentina, with daily flights from Buenos Aires to New York, Miami, and Dallas.
Presently, as explained on its website, American Airlines is not accepting Argentine pesos and debit cards. And tickets bought online with international credit cards, issued in Argentina, will be charged in U.S. dollars.
Many other international companies also complain about the issue of converting pesos into dollars. For example, La Nacion reported that other airlines like LAN and TAM stopped selling cheap tickets and reduced ticket sales one month ago. Martha Thomas, American Airlines spokeswoman, indicated that her company hopes to discuss and resolve this issue with the recently elected government.
Argentine Economy & Politics
The new government will be headed by Mauricio Macri, who will take over on December 10. Macri is expected to follow a center-right approach and reverse most of the economic policies of presidents Fernandez and Kirchner.
Argentina has been suffering from a prolonged economic crisis, heightened by high inflation, low growth, and a persistent liquidity crisis.
After 12 years of leftist governments that were first led by Nestor Kirchner, and then by his wife Cristina Fernandez, Argentine voters recently decided, although by a tight margin, to change courses, shifting from the left to the center-right.
During his presidential campaign, Macri vowed to implement sweeping reforms to overhaul the Argentine economy.
The challenges facing the new administration are colossal. Argentina has had a long, turbulent history of continuous financial crises. The scarcity of dollars is one of the most pressing issues. According to Macri and his supporters, they cannot yet put forward a policy to dismantle currency controls, as promised during the campaign, because they do not yet know the status of the public accounts.
In effect, during a press conference, Macri, as quoted by Bloomberg said, “We’re going to see what the real state is of the public accounts, what the real situation is of the central bank,” Macri said. “Currency controls are a mistake, not providing information, not having access to statistics, not having an independent central bank — these are things we are going to correct.”
In this regard, the newly appointed finance minister, former JPMorgan executive, Prat-Gay said, “Only US$7 billion are left in Central Bank reserves.” He then added, “We have to do some subtraction, but we don’t know exactly how much needs to be subtracted,” according to the Buenos Aires Herald.
Argentines, Airlines, and Bitcoins
Because of financial crises, many Argentines have been carrying out financial transactions with bitcoins. As one of the foremost bitcoin pioneers, Argentine Wences Casares said, Argentina has suffered so many monetary crises “that most Argentines understand the appeal of Bitcoin immediately and use it to protect themselves from those issues.”
A few airlines, such as Polish Airline LOT and airBaltic, are already accepting payments with bitcoins, allowing to send payments from your desktop, web or mobile bitcoin wallets. Also, you can buy airline tickets with bitcoins in many travel companies such as aBitSky and BtcTrip.
Moreover, in February, UATP, a global airlines payment system, announced its partnership with Bitnet, stating: “This relationship will allow UATP to offer its Network of 260+ airlines the ability to accept Bitcoin payments in a simplified manner.”
The announcement also highlighted that “Our partnership will make it easier for UATP’s member airlines to accept payments in bitcoin via a lightweight integration that avoids impact to downstream systems and leverages existing UATP reporting and refund interface.”
UATP is owned by major airlines such as British Airways, Delta, and Lufthansa. Indeed, UATP covers “95% of scheduled worldwide available seat kilometers (ASK).” Most interestingly, American Airlines is already using UATP.
So, in Argentina, the need to perform transactions with an international, low-cost, fast, and secure currency is pressing. Hence, here is an opportunity for more airlines to wake up and start accepting bitcoins. American Airlines and other companies serving Argentina, such as LAN and TAM should consider taking bitcoins directly.
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