American Airlines Stops Accepting Payments in Argentine Pesos

American Airlines Group Inc. on Tuesday stopped accepting Argentine pesos for tickets owing to currency controls that were affecting its ability to repatriate earnings, the company said.

The move comes as a shortage of hard currency intensifies in the South American country, suffocating importers and foreign firms operating in Argentina. Local importers say the country's central bank owes them more than $9 billion for goods they have already brought into the country.

American Airlines, the largest U.S. operator to Argentina with 27 weekly flights to Buenos Aires from three U.S. hubs, 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.

As a result of the new policy, Argentines will have to buy tickets in dollars or another foreign currency. American, which will boost its flights to up to 35 a week in high season starting in December, said it "looks forward to working with the [Argentine] Central Bank and the new government on this matter."

American declined to say when it might reverse the policy.

President-elect Mauricio Macri, who will be sworn in on Dec. 10, has pledged to end currency controls, which were implemented by the administration of departing President Cristina Kirchner in 2011 to contain rising demand for U.S. dollars. But the move had the opposite effect and resulted in a steady erosion of foreign currency reserves at the country's central bank.

Write to Susan Carey at susan.carey@wsj.com

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(END) Dow Jones Newswires

November 25, 2015 15:15 ET (20:15 GMT)

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