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Last Updated: Tuesday, 13 July, 2004, 22:21 GMT 23:21 UK
Peruvian air travel chaos worsens
Aero Continente plane (file)
Aero Continente planes are not going anywhere
Hundreds of travellers in Peru have remained grounded for a second day, after the government stopped flights by the country's leading airline.

The decision against Aero Continente was taken on Monday, after its insurance expired at the weekend.

The airline has been put on a US government blacklist of companies with suspected links to drug traffickers.

Aero Continente has strongly denied any such links - but the blacklisting means no company will insure the firm.

The Transport Ministry said on Monday that it was suspending Aero Continente's flights as a replacement insurer could not be found.

It added that a contingency plan would be put in place for other airlines to take over Aero Continente's routes, which make up 60% of the Peruvian market.


The BBC's Hannah Hennessy in Lima says the crisis comes at a particularly busy time for Peru's airline industry.

It is the height of the tourist season in Peru and the Copa America football tournament - Peru's biggest sporting showcase in decades - is under way.

Fernando Zevallos
Airline founder Fernando Zevallos is also on a US blacklist
Football fans have been stranded in Lima and other cities across the country.

Because of flight cancellations, hundreds of people have also been unable to leave in tourist sites like the former Inca capital of Cusco and Iquitos, on the banks of the Amazon.

Airline spokesman Gonzalo Iwasaki told CPN radio that the firm had been surprised by the government's decision.

Washington put Aero Continente's founder Fernando Zevallos on a blacklist of foreign "drug kingpins" at the beginning of June.

It ordered the US-assets of both Mr Zevallos - who denies any wrongdoing - and Aero Continente to be frozen.

Under US legislation, people placed on the US list of drug traffickers and their businesses are denied access to the American financial system.

Mr Zevallos, 46, currently faces trial in Peru on cocaine trafficking charges.

The US Drug Enforcement Administration says its has launched more than 30 investigations into Mr Zevallos.

He insists he is the victim of character assassination by convicted drug dealers turned informers, overzealous US drug agents and business rivals.

Peru coca growers march on Lima
04 May 04  |  Americas
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27 Jun 03  |  Americas
US thanks Colombia on drugs war
02 Mar 01  |  Americas
Country profile: Peru
06 May 04  |  Country profiles

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