President Chavez halts U.S. flights into Venezuela

March 18, 2006

President Hugo Chavez, on the recommendation of the Venezuelan National Civil Aeronautics Institute, halted flights of Continental, Delta and possibly American airlines into their country. This is in response to restrictions the U.S. imposed on Venezuelan airlines 10 years ago, citing safety concerns.

What It Means:
The greatest risk is that other Latin American countries would follow suit, further restricting U.S. airline access to their aviation industries.

Action Steps:
Hopefully, you have already gotten out of airline stocks.They are risky investments, anyway, since they have expensive fixed and variable costs, and little room to raise prices due to competition. Another reason to increase shares in Latin American country mutual funds.