Cancelled Flights, No Government Bailout. Brazil’s Varig Is on Its Last Leg.

    Brazilian aviation authorities blocked a deal that would have thrown a lifeline to Brazil’s troubled flagship airline as employees held protests in the nation’s capital Tuesday, April 11, calling for a federal bailout.

    Brazil’s Civil Aviation Authority shot down a proposed deal that would have let a small local airline, OceanAir, take over some of the unprofitable routes of Viação Aérea Rio-Grandense, or Varig, the company’s press office said.

    The deal was vetoed on the grounds that flight slots and airport space cannot be negotiated, the Varig press office said.

    Varig is reeling under an estimated US$ 3.3 billion in debt and is currently in the restructuring phase of bankruptcy proceedings.

    In recent days, the airline has been forced to cancel flights because it cannot meet operating payments. It also risks having its planes grounded for nonpayment of airport fees in Brazil.

    Some 300 Varig employees boarded a chartered jet to Brasí­lia, the nation’s capital, to call on the federal government to bail out the company, which employs 11,000 people.

    On Friday, Varig President Marcelo Bottini went to Brasí­lia to seek a moratorium on debt payments and a cash injection in the company.

    However, Brazilian Finance Minister Guido Mantega said separately last week that there will be no federal cash bailout, causing Varig stocks to slide.

    Government officials are still assessing what can be done for the flagship firm.

    Varig’s former cargo operation, VarigLog, last week offered US$ 350 million for Varig’s commercial operations. VarigLog, which is owned by a group of Brazilian businessmen and US investment fund Matlin Patterson, proposed setting up a new Varig to take over operations, leaving the company’s massive debts with the old company.

    Meanwhile, Varig is studying plans to cut costs by returning 15 planes to leasing companies. It is currently only running 54 of its 71 planes because it lack funds to maintain all of them. It is also looking at cutting loss-making regional flights

    Mercopress – www.mercopress.com

    Tags:

    • Show Comments (0)

    Your email address will not be published. Required fields are marked *

    comment *

    • name *

    • email *

    • website *

    This site uses Akismet to reduce spam. Learn how your comment data is processed.

    Ads

    You May Also Like

    Rio Royale

    Brazilian Amazon’s Açaí Graduates as Sophisticated Spirit

    Around a decade ago, the açaí berry (pronounced ah-ssa-ee) was starting to get a ...

    Beauties and Soccer from Brazil

    Media Rights America LLC (MRA), a content rights and brokerage management group, announced it ...

    World Cup Mascot 2014

    World Cup and Olympics: Just Another Example of Brazil’s Perverted Generosity

    Brazilian history begins with a gesture of inverted generosity: civilizing the native population, exploiting ...

    Suriname by Tarso Sarraf

    Illegal Brazilians in Suriname Spark Maroons’ Bloody Revenge

    After a Brazilian reportedly killed a mixed white-negro local resident, a member of a ...

    US Company Ads Vex Brazilians

    Using emotionally-charged ads in the Brazilian media, American- based company Monsanto is trying to ...

    To Brazil, Castro Can Do No Wrong

    By its inaction, Brazil has blown an opportunity to show the world that it ...

    Dilma meets with Obama at White House

    Brazil President’s Complaints in Germany and Now to Obama Are Not Making Her Friends

    Brazilian president Dilma Rousseff, at the meeting yesterday at the White House with president ...

    After Record High, Brazilian Stocks Sink

    Latin American markets dropped, with Brazilian stocks posting some of the region’s biggest losses, ...

    All Systems Go for Brazil’s A-Bomb

    Brazil has refused to allow inspections that would reveal the capacity, characteristics and scope ...

    It Serves US Right

    In the 80’s, Osama Bin Laden was the right arm of the CIA against ...