Brazilian airline VARIG cancels 11 international and six national flights

22 June 2006

Brasilia, Brazil, 22 June – Brazilian airline Varig said Wednesday it would temporarily cancel 11 international connections and six domestic flights, accounting for 61 percent of the company’s regular flights.

The temporary suspension includes 11 international destinations: Milan, Munich, Madrid, Paris, New York, Miami, Los Angeles, Mexico City, Montevideo, Asuncion and Bogota.

Varig also suspended six domestic flights to Belo Horizonte, Boa Vista, Goiânia, Natal, Petrolina and Vitória, representing 30 percent of its domestic connections.

The association of Varig Group Workers (TGV), which is part of the consortium that won the auction for sale of the company, said that just 25 company aircraft were in use.

A further 16 were in maintenance and 20 were grounded due to legal decisions, which require they be returned to the companies that lease the aircraft to Varig.

According to the decision of a Rio de Janeiro court which Monday approved the sale of Varig to NV Participações, a consortium made up of TGV and foreign investors, by Friday the group must make a payment of US$75 million to take command of the company. So far the foreign investors involved in the consortium have not been named.

If the payment is not made, a further auction will be held.

On Tuesday TGV asked Brazilian economic and social development bank, Banco de Desenvolvimento Económico e Social (BNDES) for US$150 million to resolve Varig’s cash flow troubles. (macauhub)