VARIG
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The future of VARIG Brazilian Airlines
Hi everyone! Do you by any chance have any idea of what will happen to VARIG in the forseen future? Thanks in advance for your time
They'll just carry on as before.
Going bankrupt has been a regular thing for Varig over the years, along with having aircraft seized at various points round the world and/or having to give them back to financiers.
Goodness knows why anyone continues to give them finance, except that the lease rates must be huge and the contracts watertight.
Going bankrupt has been a regular thing for Varig over the years, along with having aircraft seized at various points round the world and/or having to give them back to financiers.
Goodness knows why anyone continues to give them finance, except that the lease rates must be huge and the contracts watertight.
Varig Future
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New on NG, from your response it seems that you are with Varig? If that is the case why are you asking here? You probably know more than we do.
My guess, from news reports and rumours, would be that Varig will have a harder time coming back from protection this time around. Unless the company is restructured and the current management are shown the door, no-one will be interested in a buy out. Would you put your money in a company still run by the same bunch of clowns?
Added to that the competition is not sitting still. TAM has just been elected the best airline in Brasil and Gol is very agressive in pursuing new markets. Both have more modern fleets and a better image than Varig.
I would love to see Varig bought out by TAP, fleets restructured, a proper accounting system in place, and a realistic schedule. Unfortunately, as ever here it will probably end up in pizza. Some jeitinho to get Varig back in business, followed by billions more Reais from the taxpayer and bankrupcy again in five years.
My guess, from news reports and rumours, would be that Varig will have a harder time coming back from protection this time around. Unless the company is restructured and the current management are shown the door, no-one will be interested in a buy out. Would you put your money in a company still run by the same bunch of clowns?
Added to that the competition is not sitting still. TAM has just been elected the best airline in Brasil and Gol is very agressive in pursuing new markets. Both have more modern fleets and a better image than Varig.
I would love to see Varig bought out by TAP, fleets restructured, a proper accounting system in place, and a realistic schedule. Unfortunately, as ever here it will probably end up in pizza. Some jeitinho to get Varig back in business, followed by billions more Reais from the taxpayer and bankrupcy again in five years.
Varig’s difficulties
Posting this here for the visibility and because the issue involves international carriers, mods please move to LatAmCar if more suitable.
Strange to be posting from Brazil and asking the world what’s happening here. The view from outside is often clearer though and I know there are sane Varig heads on Pprune, not to mention GE Leasing and other interested parties.
To cut a long story short Varig seem to be on their last legs. Debt appears insurmountable, growing by the day, management is revolving-door and all the attempts at rescue or even sell-off of profitable subsidiaries have grounded on legal shoals. Whatever the idea, good or bad, there is legal opposition to block it. The company has been saved from having eleven aircraft, including the 777s, returned to owners, through legal action in New York, but with time limits.
Flight cancellations this weekend have increased, don’t know exactly why but GRU was chaos this morning with queues trailing outside the terminal.
Varig are said to still have 24% of the overall Brazilian market. Don’t remember how that breaks down domestic/international. Brazilian DAC (CAB) gave an interview last week indicating they’re working on several contingency plans, domestic and international. If Varig stops, international should be not much of a problem, temporary license for other carriers to take up the slack. Domestic’s more difficult; shortage of 737s and A319/20s. A one-quarter chunk from supply in what’s supposed to be the world’s fourth largest air transport network could be dramatic to say the least.
No news on local media today. Any ideas from cool heads in Pprune?
Strange to be posting from Brazil and asking the world what’s happening here. The view from outside is often clearer though and I know there are sane Varig heads on Pprune, not to mention GE Leasing and other interested parties.
To cut a long story short Varig seem to be on their last legs. Debt appears insurmountable, growing by the day, management is revolving-door and all the attempts at rescue or even sell-off of profitable subsidiaries have grounded on legal shoals. Whatever the idea, good or bad, there is legal opposition to block it. The company has been saved from having eleven aircraft, including the 777s, returned to owners, through legal action in New York, but with time limits.
Flight cancellations this weekend have increased, don’t know exactly why but GRU was chaos this morning with queues trailing outside the terminal.
Varig are said to still have 24% of the overall Brazilian market. Don’t remember how that breaks down domestic/international. Brazilian DAC (CAB) gave an interview last week indicating they’re working on several contingency plans, domestic and international. If Varig stops, international should be not much of a problem, temporary license for other carriers to take up the slack. Domestic’s more difficult; shortage of 737s and A319/20s. A one-quarter chunk from supply in what’s supposed to be the world’s fourth largest air transport network could be dramatic to say the least.
No news on local media today. Any ideas from cool heads in Pprune?
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Well, TAP sent a Life Saver, but someone within FRB (Ruben Berta Foundation) is still living in the XVI century, so it believes the portuguese are still colonialists trying to reconquer Brasil.
If you think that Nelson Tanure (a Brazilian Tycoon known to buy companys lost in debt)is going to do any good to Varig, just look what happened to the companies he bought.
My two cents is either FRB get is act together or TAM and GOL will have a nice Xmas gift.
Check Six Krueger....
If you think that Nelson Tanure (a Brazilian Tycoon known to buy companys lost in debt)is going to do any good to Varig, just look what happened to the companies he bought.
My two cents is either FRB get is act together or TAM and GOL will have a nice Xmas gift.
Check Six Krueger....
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Had the dubious pleasure of paxing on them LHR-SCL return earlier this year. If the shambolic nature of these flights is anything to go by, I’m surprised they are still flying…
On three of the four sectors, the check-in had a different a/c in their system than the a/c operating the flight. In two of these cases this caused only minor problems, as they were 777s. The last one, however, was amazing: they were checking in a 777 (from their main base at Sao Paolo, no less!), that turned out to be – an MD-11 ! In the ensuing mayhem during boarding, the CC were pretty much absent and let the pax more or less sort it out themselves.
CC on all four sectors were surly and for most of the time hidden somewhere. If this outfit keeps flying, they certainly won’t ‘welcome’ me aboard any more!
On three of the four sectors, the check-in had a different a/c in their system than the a/c operating the flight. In two of these cases this caused only minor problems, as they were 777s. The last one, however, was amazing: they were checking in a 777 (from their main base at Sao Paolo, no less!), that turned out to be – an MD-11 ! In the ensuing mayhem during boarding, the CC were pretty much absent and let the pax more or less sort it out themselves.
CC on all four sectors were surly and for most of the time hidden somewhere. If this outfit keeps flying, they certainly won’t ‘welcome’ me aboard any more!
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VARIG
I see that the planned asset auction scheduled for this week has been cancelled by a judge in Rio de Janiero.
Can anyone shed any light what is likely to happen?
It seems strange as TAM havent yet released their schedules or fares for the London proposed service for this autumn. I suppose they are holding off until the outcome of the "auction"?
Another B777 was seized in JFK last week by the lease company.
Can anyone shed any light what is likely to happen?
It seems strange as TAM havent yet released their schedules or fares for the London proposed service for this autumn. I suppose they are holding off until the outcome of the "auction"?
Another B777 was seized in JFK last week by the lease company.
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Does anyone have any news on VARIG?
The thread topic is basically my question. What is the current situation on VARIG and its auctioning off? Things seem to be a little quiet.
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BBC news are reporting that the Employee Group have proven the can finance the deal through a debenture issue but have until this Friday to pay a $40M deposit which is easier said than done. Am surprised given that this offer appears to be going through for some 50% less than was wanted there hasnt been a bit more interest, especially as the debt is cleared. I had heard TAP might make a bid in the past but it came to nothing, although given the links between the two countries would make sense.
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The sale to the employee group was approved last night after they proved that they have the finance to complete the deal, apart from the debentures. They have until Friday to pay a deposit of U$75m when they can formally take control of operations. If they don't pay by Friday the auction will be considered null and void.
As has happened every day recently Varig has cancelled flights again today, 14 so far including Rio-London.
Several other companies looked at the files and decided not to place a bid. They include TAP, TAM, Oceanair and GOL. They obviously didn't like what they saw very much and chose not to place a bid.
One factor may have been that Varig don't own the routes or slots, they are distributed by the government to the various carriers. So, TAM stands to gain extra routes and slots in the event of Varig going under, or simply being unable to service the routes (ie to the USA, fear of losing the aircraft).
This novela has a long way to go yet, one of the main reasons behind Varigs problems was the overstaffing, and who has just bought the company?
As has happened every day recently Varig has cancelled flights again today, 14 so far including Rio-London.
Several other companies looked at the files and decided not to place a bid. They include TAP, TAM, Oceanair and GOL. They obviously didn't like what they saw very much and chose not to place a bid.
One factor may have been that Varig don't own the routes or slots, they are distributed by the government to the various carriers. So, TAM stands to gain extra routes and slots in the event of Varig going under, or simply being unable to service the routes (ie to the USA, fear of losing the aircraft).
This novela has a long way to go yet, one of the main reasons behind Varigs problems was the overstaffing, and who has just bought the company?
Last edited by alemaobaiano; 20th Jun 2006 at 13:52.
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Brazilian airline cancels flights
The embattled Brazilian airline Varig has been forced to cancel 67 of its 180 daily flights amid mounting fears of financial collapse.
The move came just a day after a bankruptcy judge agreed to sell the airline to a consortium of Varig workers and two foreign investors.
This saved Varig from immediate liquidation, but the consortium must now find $75m (£40m) by Friday.
The judge has warned that without this first payment the buyout will fail.
The NV Participacoes, which represents Varig workers and two foreign investors, has agreed to pay $449m for the struggling airline.
Reports in the Brazilian media say it is appealing to Brazil's National Development Bank for a loan to cover the first deposit required for the sale.
Brazil's national airport authority has said it will begin demanding that Varig pays its airport fees every day, in cash.
The news came as the country's civil aviation authorities met other airlines to divide up Varig's routes should it cease to fly.
Increased competition
Varig has been under bankruptcy protection for a year.
It was the top airline in Brazil until 2004, but was then overtaken by TAM and later by Gol.
The airline has suffered years of financial problems because of rising costs and growing low-cost competition.
It now has just 16.7% of the domestic market, but remains the leading Brazilian carrier internationally, with a 66.4% share.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/h...ss/5101002.stm
The embattled Brazilian airline Varig has been forced to cancel 67 of its 180 daily flights amid mounting fears of financial collapse.
The move came just a day after a bankruptcy judge agreed to sell the airline to a consortium of Varig workers and two foreign investors.
This saved Varig from immediate liquidation, but the consortium must now find $75m (£40m) by Friday.
The judge has warned that without this first payment the buyout will fail.
The NV Participacoes, which represents Varig workers and two foreign investors, has agreed to pay $449m for the struggling airline.
Reports in the Brazilian media say it is appealing to Brazil's National Development Bank for a loan to cover the first deposit required for the sale.
Brazil's national airport authority has said it will begin demanding that Varig pays its airport fees every day, in cash.
The news came as the country's civil aviation authorities met other airlines to divide up Varig's routes should it cease to fly.
Increased competition
Varig has been under bankruptcy protection for a year.
It was the top airline in Brazil until 2004, but was then overtaken by TAM and later by Gol.
The airline has suffered years of financial problems because of rising costs and growing low-cost competition.
It now has just 16.7% of the domestic market, but remains the leading Brazilian carrier internationally, with a 66.4% share.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/h...ss/5101002.stm
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Yesterday 138 of 192 programmed flights were cancelled.
Services to Milán, Munich, Madrid, París, Nueva York, Los Angeles, México City, Montevideo, Asunción and Bogotá have been suspended until further notice
The plan is to keep daily service to Frankfurt (2), London (1), Miami (1), Buenos Aires (4), Lima (1), Santa Cruz de la Sierra (1), Santiago de Chile (1) and Caracas (1),although this was not totally possible yesterday.
Tomorrow will be a key day for the company - will NVP have the cash to keep the company going?
Services to Milán, Munich, Madrid, París, Nueva York, Los Angeles, México City, Montevideo, Asunción and Bogotá have been suspended until further notice
The plan is to keep daily service to Frankfurt (2), London (1), Miami (1), Buenos Aires (4), Lima (1), Santa Cruz de la Sierra (1), Santiago de Chile (1) and Caracas (1),although this was not totally possible yesterday.
Tomorrow will be a key day for the company - will NVP have the cash to keep the company going?
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Major trouble today as many international flights are suspended. Heard that aircraft are being impounded left right and centre, mainly B777s.
LHR/FRA routes seem to be the only ones remaining but NO LHR flight today. People & ticketed pax are now starting to get stranded.
From our Internal Travel Dept
American Express Global Business Travel has been advised:
Brazilian airline cancels flights:
The embattled Brazilian airline Varig has been forced to cancel 67 of its 180 daily flights amid mounting fears of financial collapse.
The move came just a day after a bankruptcy judge agreed to sell the airline to a consortium of Varig workers and two foreign investors.
This saved Varig from immediate liquidation, but the consortium must now find $75m (£40m) by Friday.
The judge has warned that without this first payment the buyout will fail.
The NV Participacoes, which represents Varig workers and two foreign investors, has agreed to pay $449m for the struggling airline.
Reports in the Brazilian media say it is appealing to Brazil's National Development Bank for a loan to cover the first deposit required for the sale.
Brazil's national airport authority has said it will begin demanding that Varig pays its airport fees every day, in cash.
The news came as the country's civil aviation authorities met other airlines to divide up Varig's routes should it cease to fly.
Increased competition
Varig has been under bankruptcy protection for a year.
It was the top airline in Brazil until 2004, but was then overtaken by TAM and later by Gol.
The airline has suffered years of financial problems because of rising costs and growing low-cost competition.
It now has just 16.7% of the domestic market, but remains the leading Brazilian carrier internationally, with a 66.4% share.
Flights from Brazil to Milan, Munich, Madrid, Paris, New York, Miami, Los Angeles, Mexico City, Montevideo, Asuncion and Bogota are temporarily suspended," said the company.
"Flights from Brazil to Frankfurt, London, Buenos Aires, Lima, Santa Cruz de la Sierra, Santiago de Chile and Caracas are operating as usual," the company added.
---------------------------------------------------
LHR/FRA routes seem to be the only ones remaining but NO LHR flight today. People & ticketed pax are now starting to get stranded.
From our Internal Travel Dept
American Express Global Business Travel has been advised:
Brazilian airline cancels flights:
The embattled Brazilian airline Varig has been forced to cancel 67 of its 180 daily flights amid mounting fears of financial collapse.
The move came just a day after a bankruptcy judge agreed to sell the airline to a consortium of Varig workers and two foreign investors.
This saved Varig from immediate liquidation, but the consortium must now find $75m (£40m) by Friday.
The judge has warned that without this first payment the buyout will fail.
The NV Participacoes, which represents Varig workers and two foreign investors, has agreed to pay $449m for the struggling airline.
Reports in the Brazilian media say it is appealing to Brazil's National Development Bank for a loan to cover the first deposit required for the sale.
Brazil's national airport authority has said it will begin demanding that Varig pays its airport fees every day, in cash.
The news came as the country's civil aviation authorities met other airlines to divide up Varig's routes should it cease to fly.
Increased competition
Varig has been under bankruptcy protection for a year.
It was the top airline in Brazil until 2004, but was then overtaken by TAM and later by Gol.
The airline has suffered years of financial problems because of rising costs and growing low-cost competition.
It now has just 16.7% of the domestic market, but remains the leading Brazilian carrier internationally, with a 66.4% share.
Flights from Brazil to Milan, Munich, Madrid, Paris, New York, Miami, Los Angeles, Mexico City, Montevideo, Asuncion and Bogota are temporarily suspended," said the company.
"Flights from Brazil to Frankfurt, London, Buenos Aires, Lima, Santa Cruz de la Sierra, Santiago de Chile and Caracas are operating as usual," the company added.
---------------------------------------------------
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Brazilian Military 707s on standby.....
FROM CNN
Brazil's airline Varig in death throes
Workers hope to buy carrier; passengers stranded all over the world
A stranded Varig passenger waits at Congonhas airport in Sao Paulo, Brazil, on Thursday. Some people waited days to fly.
Image:
RIO DE JANEIRO, Brazil (AP) -- The survival of Brazil's flagship airline Varig is on the line as a group of employees scramble to raise enough money for a first payment on the carrier, which faces liquidation if the money isn't paid or another suitor doesn't emerge by Friday.
The workers' group, TGV, faces a Friday deadline to make the $75 million payment, but acknowledged it may not be able to come up with the cash.
Meanwhile, Varig continued to strand passengers in Brazil and abroad on Thursday. By the afternoon it had canceled 118 of its 189 flights, Brazil's National Civil Aviation Authority said.
Other domestic and international airlines geared up to take over Varig's routes if the company is broken up, but there could be an incredible crush of people trying to get back to Brazil if the carriers can't meet the demand.
Thursday night, officials said there are 28,000 people abroad who have tickets to fly to Brazil on the airline between this week and June 30.
Thirteen thousand of them are in Europe, many of them Brazilians in Germany for the World Cup. Varig also transported Brazil's national soccer team to Germany and is scheduled to bring the defending World Cup champion team back.
But the authorities insisted that some airlines were abiding with government pleas to honor Varig tickets, making it possible for Brazilians who got stuck overseas to get home -- despite delays sometimes lasting days.
"I'm not minimizing the hassles for the passengers, but in the context of an emergency plan, I think it is a success," said Milton Zuanazzi, the aviation authority's general director.
Brazilian authorities have said Air Force planes could be used to bring back stranded Brazilians in a worst- case scenario, and the military said Thursday that two aging Boeing 707s are available if needed.
Varig's troubles deepened Wednesday, when the airline suspended dozens of routes in Brazil, Latin America, Europe and the United States and commenced cancellations amid efforts by leasing companies to seize planes and the carrier's inability to pay everything from jet fuel to airport departure fees.
TGV's $449 million offer for Varig is far below the minimum bid set at $860 million, but Brazilian Judge Luiz Roberto Ayoub said he would accept it if TGV makes its first deposit by Friday.
Failure to do so could prompt Ayoub to order the liquidation of 79-year-old Viacao Aerea Rio-Grandense SA, or Varig.
As the deadline approached, the airline's liquidation appeared imminent, with TGV head Marcio Marsillac acknowledging that his group might not manage to scrape together the initial payment.
"No one is 100 percent sure if this money will be available on Friday," Marsillac told reporters. "If it doesn't work out with the people we are negotiating with, we won't have the money to deposit."
Marsillac said TGV was negotiating with three unnamed groups to try to raise the money.
Analysts said the judge should consider other alternatives before deciding whether to let the company die -- but must act quickly before customers, who are already irate and waiting days in some cases to fly, lose complete faith in Varig.
"If the workers' consortium doesn't have the money to live up to their commitment, then let's bring in other investors," said Robert Booth, a Miami-based aviation consultant and editor of an aviation newsletter focusing on Latin America.
"This has to be done in hours, not weeks or months," he added.
Brazil's airline Varig in death throes
Workers hope to buy carrier; passengers stranded all over the world
A stranded Varig passenger waits at Congonhas airport in Sao Paulo, Brazil, on Thursday. Some people waited days to fly.
Image:
RIO DE JANEIRO, Brazil (AP) -- The survival of Brazil's flagship airline Varig is on the line as a group of employees scramble to raise enough money for a first payment on the carrier, which faces liquidation if the money isn't paid or another suitor doesn't emerge by Friday.
The workers' group, TGV, faces a Friday deadline to make the $75 million payment, but acknowledged it may not be able to come up with the cash.
Meanwhile, Varig continued to strand passengers in Brazil and abroad on Thursday. By the afternoon it had canceled 118 of its 189 flights, Brazil's National Civil Aviation Authority said.
Other domestic and international airlines geared up to take over Varig's routes if the company is broken up, but there could be an incredible crush of people trying to get back to Brazil if the carriers can't meet the demand.
Thursday night, officials said there are 28,000 people abroad who have tickets to fly to Brazil on the airline between this week and June 30.
Thirteen thousand of them are in Europe, many of them Brazilians in Germany for the World Cup. Varig also transported Brazil's national soccer team to Germany and is scheduled to bring the defending World Cup champion team back.
But the authorities insisted that some airlines were abiding with government pleas to honor Varig tickets, making it possible for Brazilians who got stuck overseas to get home -- despite delays sometimes lasting days.
"I'm not minimizing the hassles for the passengers, but in the context of an emergency plan, I think it is a success," said Milton Zuanazzi, the aviation authority's general director.
Brazilian authorities have said Air Force planes could be used to bring back stranded Brazilians in a worst- case scenario, and the military said Thursday that two aging Boeing 707s are available if needed.
Varig's troubles deepened Wednesday, when the airline suspended dozens of routes in Brazil, Latin America, Europe and the United States and commenced cancellations amid efforts by leasing companies to seize planes and the carrier's inability to pay everything from jet fuel to airport departure fees.
TGV's $449 million offer for Varig is far below the minimum bid set at $860 million, but Brazilian Judge Luiz Roberto Ayoub said he would accept it if TGV makes its first deposit by Friday.
Failure to do so could prompt Ayoub to order the liquidation of 79-year-old Viacao Aerea Rio-Grandense SA, or Varig.
As the deadline approached, the airline's liquidation appeared imminent, with TGV head Marcio Marsillac acknowledging that his group might not manage to scrape together the initial payment.
"No one is 100 percent sure if this money will be available on Friday," Marsillac told reporters. "If it doesn't work out with the people we are negotiating with, we won't have the money to deposit."
Marsillac said TGV was negotiating with three unnamed groups to try to raise the money.
Analysts said the judge should consider other alternatives before deciding whether to let the company die -- but must act quickly before customers, who are already irate and waiting days in some cases to fly, lose complete faith in Varig.
"If the workers' consortium doesn't have the money to live up to their commitment, then let's bring in other investors," said Robert Booth, a Miami-based aviation consultant and editor of an aviation newsletter focusing on Latin America.
"This has to be done in hours, not weeks or months," he added.