• Categories
  • Archives

Brazilian Government Sees Bankrupcy-Bound Varig Airline at Brink of Precipice

Once powerful and monopolistic Varig Airlines’s debt to the Brazilian Airport Infrastructure Company (Infraero) grows by US$ 424.600 (R$ 900 thousand) every day.

This information was provided today (25) by Infraero’s president, lieutenant general José Carlos Pereira. The debt refers to the use of airport facilities for landings and takeoffs and is supposed to be charged on a daily basis.

Altogether, the airline owes Infraero US$ 242.98 million (515 million reais). Of this total, US$ 62.75 million (133 million reais) represent outstanding debts, while the rest is sheltered by the company’s process of legal recovery.

The president of Infraero, who participated in a joint public hearing conducted by four Senate commissions, affirmed that a decision in favor of complying with the law and charging Varig the daily fees may be published in the Federal Registry in the next few days.

The legal basis is a ruling by the Federal Accounting Court (TCU). "The TCU and the Ministry of Defense have expressed an enormous concern, but it winds up running afoul of what the law permits," Pereira declared. For Pereira the Varig’s "situation is getting to the brink of the precipice."

According to Pereira, there is an interest in keeping Varig in the air. "If Varig goes broke, we won’t receive anything, and there will be one fewer airline. It is in the public interest to keep Varig in the air." He said that "the government has definitely made an effort," but he emphasized that "contributing public funds is something else."

For the general director of the National Civil Aviation Agency (ANAC), Milton Zuanazzi, Varig’s problems should be solved on the basis of the legal recovery process the company is currently engaged in.

In his view, what is most relevant at the present moment is for the company to have a cash flow, instead of a reckoning of what the company owes the federal government versus what it is owed by the federal government.

The latter approach is espoused by the Workers of the Varig Group (TGV). Varig’s total debt currently amounts to US$ 3.30 billion (R$ 7 billion), while the federal government owes it US$ 2.12 billion (R$ 4.5 billion).

When asked whether a contingency plans exists in the event that Varig ceases to operate, Zuanazzi replied:

"A regulatory agency that lacks a contingency plan is an irresponsible agency, and a regulatory agency that discusses a contingency plan while Varig continues to operate is equally irresponsible."

Agência Brasil

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

Damascus Fair Draws Brazil’s Small Businesses Attention

São José do Rio Preto, city in the interior of the Brazilian southeastern state ...

‘Healthy Brazil’ Fights Overweight, a Problem with 40% of Brazilians

Brazil’s federal government launched last week the Healthy Brazil project, aimed at encouraging Brazilians ...

China Wants Brazil to Cut Iron Ore Prices by 82%

Brazil is being asked to lower the prices of iron ore by China the ...

Consulates Abroad Join Brazil’s Widespread Striking Movement

Brazil’s Foreign Ministry denied in a statement that diplomats have joined the strike affecting ...

Brazil Hosts Local Development Expo

Representatives of Brazil, Chile, Spain, Portugal, Mozambique, Guinea-Bissau, and Cape Verde, together with international ...

Brazil’s Lula Vows Elections Won’t Change His Economic Policy

In a speech in the city of Campinas, interior of São Paulo state, president ...

Less than a Month Before Brazil Elections There’s a Tie Between Two Leading Candidates

A poll whose results were released on Wednesday, September 10, reports Brazilian President Dilma ...

Brazil’s Petrobras Pumps 6% Less Oil Overseas

Brazil’s state-owned oil company Petrobras had its domestic and foreign production of petroleum and ...

African Dust Winds Bring 56% of Brazil Amazon Jungle’s Minerals

A single spot in the Sahara desert is responsible for over half the Amazon ...

For Giros, a Brazilian Film Company, Documentary and Excitement Go Together

The films and documentaries of Brazilian production company Giros, based in Rio de Janeiro, ...