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Old June 22nd, 2006, 01:49 AM   #121
jamesinclair
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June 21 (Bloomberg) -- Varig, the Brazilian airline that has operated in bankruptcy for a year, suspended flights to 10 international destinations including New York, Los Angeles and Madrid, after U.S. courts forced it to ground planes.

Porto Alegre, Brazil-based Varig, the country's biggest international carrier, said in a statement that it will continue service to some cities abroad such as Miami, Frankfurt, London, Buenos Aires, Lima, Santiago and Caracas.

A Varig union official said the company may have to end all service as early as today should a New York bankruptcy court order it to ground more aircraft. New York Bankruptcy Judge Robert Drain in New York is scheduled to rule today on a petition by Varig to extend an order that blocks leasing companies from seizing as many as 25 of Varig's planes.

``Throughout airports, employees feel like they're at a funeral,'' Selma Balbino, president of Brazil's ground workers union, said in a telephone interview from Rio de Janeiro. ''The situation is so critical that they may stop flying today, depending on the U.S. court decision.''

Varig is operating only 25 aircraft out of a fleet of 60, Marcio Marsillac, a representative of the airline's employee group trying to buy the airline, said yesterday. Sixteen aircraft are grounded because of lack of parts and another 20 were taken out of service to comply with U.S. court orders to return them to leasing companies, he said.

A Varig spokesman in Rio de Janeiro declined to comment. The airline's statement said service was cut also to Paris, Mexico City, Milan, Munich, Asuncion, Montevideo and Bogota.

http://quote.bloomberg.com/apps/news...fer=news_index


The article doesnt mention all destinations, such as Cancun and Johanesburg. In fact, according to their website, I can still fly to South Africa if I please

3 de Julho de 2006 Varig
RG 7390 OP
Guarulhos Int'l (GRU), So Paulo, So Paulo, Brasil
Terminal 2 17:30

Johannesburg Int'l (JNB), Johannesburg, frica do Sul
Terminal A 07:00
+ 1 dia(s)
Sem escalas
342 8:30 Econmica promocional


Incidently, anyone know if theyre the only airline in the americas to fly to south africa?
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Old June 24th, 2006, 06:05 AM   #122
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Brazil court cancels Varig sale after deposit missed

RIO DE JANEIRO, June 23, 2006 (AFP) - A Brazilian court Friday canceled the sale of bankrupt airline Varig to an employees group after it failed to make a deposit on time, and delayed a decision on the carrier's fate until next week.

The sale to NV Participacoes, a consortium of Varig employees and unidentified investors, "was invalid because of the failure to pay" a 75-million-dollar deposit, the court of Rio de Janeiro announced in a statement.

"The future of Varig will be resolved next week," it said.

The court outlined its three options: organize a new auction, call for a meeting of creditors or declare the liquidation of the airline at the request of some creditors.

The announcement came minutes after NV Participacoes said it could not pay the deposit.

"We have not made the deposit. We have not been able to reach an agreement with the investors so that they deposit the money," said Marcio Marsillac, an official of NV Participacoes, which made a 449-million-dollar offer to buy the heavily indebted airline.

"We don't know what will happen. It is up to the judge to decide now."

Bankruptcy judge Luiz Roberto Ayoub is overseeing the company which has been operating under bankruptcy protection since June 2005.

On Monday he had approved Varig's sale to NV Participacoes for 449 million dollars, far below the minimum offer of 860 million dollars set at a June 8 auction.

No one had been willing to bid at the minimum price, and so the judge opened the floor for any offer.

He had given NV Participacoes until 4:00 pm (1900 GMT) Friday to make the deposit.

The 75-million-dollar down payment was to have secured the purchase of the "operational" Varig, an entity comprising all the airline's assets, its domestic and international routes and a 52-plane fleet.

Ayoub confirmed Friday news reports of another takeover offer for Varig, from Varig Log, the carrier's former freight subsidiary which was sold in 2005 to the consortium Volo Brasil, grouping US investment fund Matlin Patterson and Brazilian investors.

Varig Log reportedly offered some 500 million dollars for Varig -- 100 million more than it offered two months ago.

Like the two previous days, about two-thirds of Varig's flights were cancelled Friday, leaving thousands of passengers stranded in airports in Brazil and abroad.

It was in danger of running out of jet fuel for lack of payment. Infraero, the state airports authority, threatened to demand cash for its unpaid airport taxes.

The former leading Brazilian airline can no longer pay its suppliers or its 10,600 employees.

The cash-strapped airline is saddled with more than three billion dollars in debt and deteriorating rapidly. It only has 19 planes in operation compared with 46 in early June.

The National Civil Aviation Agency has launched an emergency plan to deal with the crisis: 28,000 passengers holding Varig tickets are supposed to return to Brazil between now and June 30, including 5,600 attending the World Cup in Germany.

The agency claims to have found seats for the passengers on other airlines, but late Thursday dozens of Brazilians stranded in New York were still waiting for a flight home.

Two army aircraft will repatriate Brazilians if necessary, the agency said.

Once Brazil's indisputable leading airline, Varig's fortunes began to decline in the 1990s after it lost its monopoly on international routes. The last time Varig turned a profit was in 1995.
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Old June 25th, 2006, 03:23 AM   #123
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Brazil Aviation Officials OK Varig Sale
By ALAN CLENDENNING
24 June 2006

SAO PAULO, Brazil (AP) - Brazilian aviation authorities approved the sale of the cargo unit of the country's bankrupt flagship Varig airline, opening a window Saturday for the salvation of the carrier and an end to chaos for stranded ticket holders.

The company Volo de Brasil announced its intention to buy the VarigLog cargo unit earlier this year but the sale was held up by claims that Volo is controlled by foreign investors. Foreigners are allowed to own only 20 percent of Brazilian airlines.

Volo, which says its majority owners are Brazilian, offered $500 million for all of Varig on Friday. Allowing it to buy the cargo unit means Brazil's government does not have a problem with Volo's ownership structure. That suggests that Volo also would be in a good position to buy all of the country's largest international airline.

Judge Luiz Roberto Ayoub has final say over the airline's restructuring and was analyzing the Volo proposal over the weekend to determine its viability.

He told Brazil's CBN radio Saturday that approval of VarigLog's sale to Volo removed one of the biggest hurdles the firm faced in trying to buy Varig.

The 79-year-old company -- a source of pride for Brazil and renowned until recently for stellar service -- seemed on the verge of collapse this week after canceling hundreds of flights and suspending dozens of international and domestic routes.

The airline has run short of money to pay for fuel, with planes grounded amid demands by leasing companies for overdue payments.

In Germany, Brazilian soccer fans who flew into Paris; Milan, Italy; and Munich, Germany, found out that the company had suspended service to those destinations, and they were instructed to try to get home through Frankfurt, one of the few European destinations now served by Varig, the Agencia Estado news wire service said.

Paying their own way over land, they were put on long waiting lists for seats.

The government estimated earlier this week that 28,000 people were overseas and scheduled to return by June 30.

Brazil's air force said five planes would be available if the government is forced to rescue stranded passengers.

The judge indicated the entry of Volo as a new suitor for the entire company means that another auction will probably have to be held to give other investors a chance to bid.

The proposal also will be reviewed by Varig's creditors and Ayoub said he will not consider liquidating the company unless they ask him to.

On Friday, the judge rejected a $449 million bid for Varig from a workers group that failed to come up with a $75 million down payment, the authority said in a statement.

Varig has routes throughout Latin America and to Europe and the United States. Many passengers did manage to get on flights Friday despite the carrier's cancellations, but said they faced delays ranging from hours to days.

The airline has been under protection from its creditors since June 2005, and its domestic share of the market in Latin America's largest country slumped in recent years as its financial problems worsened.

Before heading into bankruptcy, Varig repeatedly appealed for a government bailout, but top Brazilian officials said they wanted a free-market solution.
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Old June 29th, 2006, 10:13 PM   #124
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Brazil's TAM carrier to purchase 37 more Airbus jets as Varig's troubles deepen
By ALAN CLENDENNING
28 June 2006

SAO PAULO, Brazil (AP) - Brazil's TAM airline announced plans Wednesday to buy 37 more Airbus jets to meet increasing domestic and international demand, just as the country's flagship Varig carrier seems poised to collapse.

TAM Linhas Aereas SA's "memorandum of understanding" for the purchase calls for delivery by 2010 of 15 Airbus 319s, 16 Airbus 320s and six Airbus 330s, chief executive Marco Antonio Bologna said.

The value of the deal wasn't released, but comes on top of firm orders by TAM for the purchase of 29 Airbuses with options to buy 20 more.

If all the planes end up being purchased, it would dramatically boost the size of TAM's fleet, which currently stands at 64 Airbuses and 20 Fokker-100s. Some of the new jets will be used to replace the Fokkers, which don't carry as many passengers as the Airbus models.

"The increased air traffic density justifies our choice of larger planes," Bologna said.

TAM plans to have a fleet of 96 planes by the end of this year, and the fleet would grow to 127 jets by 2010, the company said.

Bologna didn't mention it, but TAM is expected to benefit if the bankrupt Varig ends up getting broken up in court proceedings that have dragged on for months, prompting mass flight cancelations over the last week.

Even if Varig is saved by a last minute offer to buy it by Volo do Brasil, TAM would probably still benefit because Varig would likely survive only as a smaller carrier.

TAM is the largest Brazilian airline for domestic flights. While Varig is the biggest international carrier, TAM has been gaining ground internationally.

It already flies to Miami, New York City and Paris. The airline plans to launch service to London soon, and will add more flights in Brazil and to other South American destinations.

Varig, short for Viacao Aerea Rio-Grandense SA, canceled 199 of its 291 flights scheduled to leave Wednesday, according to Brazil's Civil Aviation Authority.

A Rio de Janeiro bankruptcy judge is expected to decide this week whether to hold an auction for the airline to consider Volo's US$500 million (398 million) bid. He has said he will not move to liquidate the company unless creditors make that request.

Varig is burdened by US$3.5 billion (2.78 billion) in debt, much of it to Brazil's government, pension funds and the country's state-owned petroleum company.

Thousands of Varig passengers have been facing travel nightmares for a week, facing delays of hours to days as they try to use their tickets to get on flights operated by other carriers.

The airline is having trouble paying for landing and departure fees and fuel for its jets, and some jets are grounded amid demands by plane leasing companies for payment of overdue bills.
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Old July 4th, 2006, 07:49 AM   #125
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Brazilian bankruptcy court wants Varig re-auction on July 12

RIO DE JANEIRO, July 3, 2006 (AFP) - A Brazilian bankruptcy judge has proposed a re-auction of ailing airline Varig on July 12, for an offer of 490 million dollars, the Rio de Janeiro court said Monday.

The judge, Roberto Ayoub, called a July 10 meeting of Varig's creditors to consider the offer and, if it is accepted, the company will be auctioned two days later, the court said.

Varig has been operating under bankruptcy protection since June 2005. According to the bankruptcy law, a direct sale of the company is prohibited and any takeover must be conducted by auction.

The US-Brazilian consortium Volo do Brasil, grouping US investment fund Matlin Patterson and Brazilian investors, offered 490 million dollars for Varig a week ago, after Ayoub cancelled its sale to a group of Varig's employees.

The employees group had placed the only acceptable bid at a June 8 auction. But Ayoub annulled the sale when the bidder was unable to make a 75-million-dollar deposit on time.

Volo do Brasil also deposited 20 million dollars with the court which kept the carrier flying, although more than half its flights were cancelled.

The airline, Brazil's biggest international carrier, is saddled with more than three billion dollars in debt and is on the brink of collapse.

Volo do Brasil wants to buy Varig free of debt and says it has all the financing necessary to run the airline and complete its restructuring.

Volo do Brasil wants Varig's brand, its domestic and international routes and its fleet of airplanes. The airline's three-billion-dollar debt would be assumed by Varig-Relacionamiento, a company that will retain several services, including airport services.

The US-Brazilian consortium bought Varig's freight subsidiary VarigLog in December 2005.

At the failed auction on June 8, Varig's routes and 52 aircraft were offered for sale at a minimum price of 860 million dollars.

Once Brazil's indisputable leading airline, Varig's fortunes began to decline in the 1990s after it lost its monopoly on international routes. The last time Varig turned a profit was in 1995.

Varig still controls 60 percent of flights outside of Brazil, flying passengers to a total of 21 foreign destinations. But rivals Tam and Gol have now left Varig with only 16 percent of the domestic market.
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Old July 5th, 2006, 10:46 PM   #126
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Brazil TAM, Gol Airlines Boost Operations On Varig Crisis
5 July 2006

SAO PAULO (Dow Jones)--Amid a major crisis for traditional but now debt-laden flag carrier Viacao Aerea Rio-Grandense (VAGV4.BR), or Varig, two other Brazilian airlines, TAM (TAMM4.BR) and Gol Linhas Aereas Inteligentes (GOL), are sytematically expanding their operations.

Late Tuesday, TAM announced seven new flights, including two international routes, one to Assuncion, the capital of Paraguay, and another to Buenos Aires, the capital of Argentina. The announcement came less than a week after Tam signed a memorandum of understanding to buy 37 airplanes from Airbus (ABI.YY).

On Monday, no-frills carrier Gol announced two new flights to Argentina. In June, the International Finance Corp., the private-sector arm of the World Bank, authorized a $50 million corporate loan for GOL to finance expansion.

TAM and Gol are taking advantage of the crisis affecting Varig, and are increasing their operations to meet rising passenger demand for both domestic and international flights, market analysts said.

"It is more than clear now that both companies want to fill in the gaps left by Varig," said an industry analyst at a local bank. The analyst asked not to be named. "Even if Varig avoids liquidation, the company will operate at a much lower profile than in the past, so TAM and Gol are anticipating that scenario."

Varig, once the largest carrier in the nation, has been struggling for several years under the weight of an 8 billion real ($3.65 billion) debt load. It has been operating under Brazilian bankruptcy law protection since July 2005.

Varig's position has crumbled because of a lack of funding for basic expenses. More than half the company's fleet is grounded, with a majority of its daily flights canceled.

In May, Varig saw its market share slip to 14% compared with 27% last year, according to monthly figures published by Brazil's National Civil Aviation Agency, or Anac. By comparison, in August 2001, before the terrorist attacks in the U.S., Varig had a market share of 42.8%

On Monday, a Brazilian civil judge set July 12 as the date for a new auction in the bankruptcy proceedings. Officially, there is only one proposal so far for Varig. Totaling some $500 million, the proposal was made by Varig's former cargo unit, VarigLog. According to local press reports, another investment group may also attempt to cobble together a consortium in time for the auction.

TAM and Gol have seen a continued increase in market share. According to Anac figures, in May, TAM accounted for 46% of all domestic passenger kilometers flown, up from 43% last year, while Gol increased its market share to 34% from 27% in May 2005.

On Wednesday, UBS raised its share price targets for TAM and Gol, citing favorable fundaments. "We believe Varig's ongoing struggles will continue to allow both companies to achieve higher than originally forecasted load factors, even as we take into account ever more aggressive fleet rollout plans," UBS said.

UBS raised its share price target for TAM to 102.00 Brazilian reals ($46.74) from the previous BRL80.00. For GOL, the investment house hiked its target price to BRL103.00 from BRL95.00.

As of 1345 GMT, TAM shares were down 2.3% at BRL59.60, while Gol shares were falling 1.43%, quoted at BRL76.00. By comparison, the main stock index, the Ibovespa, was down 1.93%.
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Old July 5th, 2006, 11:54 PM   #127
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From: http://www.boston.com/business/globe...ilian_airline/
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Second bidder may make pitch for Brazilian airline
By Associated Press | July 5, 2006
RIO DE JANEIRO -- A second group was considering bidding for Brazil's embattled flagship airline Varig, local media reported yesterday, a day after a judge set the date for a new bankruptcy auction.

On Monday, Judge Luiz Roberto Ayoub said a new auction would be held on July 12, assuming creditors approved a $500 million offer from Volo do Brasil, the investment group that purchased Varig's cargo unit VarigLog.
If creditors approve the offer at a July 10 meeting, the company would be sold at auction two days later.
Under Brazilian law, the sale must take place through public auction even though there appeared to be only one interested party.
But yesterday the Estado news agency reported a second group led by Roberto Lima Netto, the former president of Brazilian steel maker Companhia Siderurgica Nacional, was studying whether to make a $600 million bid for the carrier.
The bid would be made in a joint proposal with U S -based consultancy Cinzel Partners, according to Estado.
If a second group does bid they will have to compensate Volo do Brasil for covering Varig's airport fees and fuel costs in recent days in order to keep the airline flying, Ayoub said earlier.
But even with the cash infusion from Volo do Brasil, Varig has been forced to cancel more than half of its flights in Brazil and abroad.
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Old July 11th, 2006, 09:18 PM   #128
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Brazil's Varig airline receives new bid, could face new auction
11 July 2006

SAO PAULO, Brazil (AP) - A Brazilian investment group has offered US$500 million (euro393 million) for the country's struggling flagship airline Varig, and it could go to auction next week, the company said Tuesday.

A bankruptcy judge will put the proposal from Volo do Brasil to creditors of the indebted Viacao Aerea Rio-Grandense SA airline on July 17, Varig spokesman Paulo Cesar said in Rio de Janeiro.

"Assuming they accept it, we'll have a new auction on July 18," he said.

Judges at a Rio de Janeiro bankruptcy court met for seven hours Monday before voting to accept the bid from Volo do Brasil, which recently purchased Varig's cargo unit VarigLog.

If creditors accept the offer -- currently the only one -- Varig will be put up for auction to allow other bidders a chance to take over the company.

The minimum asking price will be 52.8 million Brazilian reals (US$24 million;euro19 million), which will be passed on to creditors. The buyer will also be obliged to issue 100 million reals (US$46
million;euro36 million) in 10-year debentures to pay off debts.

Varig has been in financial trouble for years, with debts now totaling around 8 billion reals (US$3.7
billion;euro2.9 billion).

The airline is having trouble paying for landing and departure fees and fuel for its jets. More than two-thirds of its planes are grounded as leasing companies have demanded their crafts back and the company can't pay for their maintenance.

Volo do Brasil has handed more than US$11 million
(euro8.6 million) to Varig to ensure the airline continues operating until a final decision is made on its future.

On June 8, a Varig workers' group agreed to purchase the airline for US$449 million (euro351 million) at a bankruptcy auction. But it was unable to make the first payment, throwing the airline's fate back into doubt.

On Friday, the court-appointed restructuring administrator, Deloitte, declared that liquidation would be a better option for creditors than accepting the only offer for the ailing carrier.

However, changes to the offer presented Monday were "a considerable improvement," Deloitte director Luiz Alberto Fiore told the Estado newswire.
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Old July 18th, 2006, 02:36 AM   #129
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Creditors Reject VarigLog Bid For Airline Varig
17 July 2006

SAO PAULO (Dow Jones)--Creditors in Brazil's flagship airline Viacao Aerea Rio-Grandense SA (VASP4.BR), or Varig, Monday voted to reject a $500 million bid for the company's operating assets from Volo do Brasil, potentially signaling the end for the ailing company.

Of the main creditor groups, representatives of Varig workers and pensioners voted in favor of the offer, as did the principal government creditors, an airline spokesman said Monday.

However, other key creditors, led by airplane leasing companies, rejected the bid from Volo do Brasil, the investment group that recently purchased Varig's cargo unit VarigLog, he added.

Rio de Janeiro bankruptcy judges must now decide on whether to continue to search for a restructuring solution for the indebted airline or to liquidate its assets.

Varig has been in financial trouble for a number of years amid mounting debts, which now total around 8 billion Brazilian reals ($3.6 billion).

The airline is having trouble paying for landing and departure fees and fuel for its jets. Meanwhile, over two-thirds of its planes are grounded as leasing companies demand their craft back and the company can't pay for basic maintenance.

The company has only been able to continue flying at all because of daily deposits by Volo, which already total over $13 million.
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Old July 20th, 2006, 05:57 PM   #130
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A Brazilian airline grows as rivals fail
Gol follows the path of low- cost carriers
Bloomberg
Romina Nicaretta
20 July 2006

Before founding Gol Linhas Aereas Inteligentes five years ago, the Brazilian businessman Constantino de Oliveira Jr. examined how the low-cost, low-fare airlines Ryanair Holdings and Southwest Airlines did business.

Oliveira adopted most of those carriers' cost-cutting practices, including reducing the time airplanes spend on the ground and providing a no-frills cabin service. One policy he does not follow is to always offer low fares.

"It doesn't make sense to charge 100 reals for a flight if there are people queuing to buy a ticket for 250 reals," he said.

Expense paring and a pricing policy that reflects ticket demand have made Gol one of the world's most profitable low-cost airlines and turned the Oliveiras into Brazil's second-richest family. Now, Gol plans to expand market share by filling gaps in services left by Varig, Brazil's bankrupt former flagship carrier, and two other airlines that have closed since Gol started.

"Gol has been very aggressive in getting Varig airport slots," said Gilberto Nagai, a manager of Latin American stocks at ABN AMRO in Sao Paulo. "They will profit from Varig's shrinking."

Gol's share of Brazil's domestic market jumped to 35 percent in June from 27 percent in January. In the same period, the share of Varig, whose full name is Viacao Aerea Rio-Grandense, fell to 11 percent from 20 percent, while that of TAM, based in Sao Paulo, increased to 48 percent from 45 percent, according to Brazil's civil aviation regulator.

Gol's growth has been accompanied by an increase in its share price. Since its initial public offering in June 2004, the company's shares have soared 222 percent in U.S. dollar terms, outpacing a 139 percent gain in Brazil's benchmark stock index. Gol's shares traded at 66.86 reals late Wednesday. The increase has taken the value of the Oliveira family's 74 percent stake in the company to 9.2 billion reals, or $4.2 billion. That is the biggest fortune in Brazil after bankers Moise and Joseph Safra, who are worth 14.7 billion reals, according to estimates by Carlos Coradi, president of the banking consulting company EFC-Engenheiros Financeiros & Consultores in Sao Paulo, and Jose Ramon, director of Theca Corretora de Valores. A spokesman for the Safras in Sao Paulo declined to comment.

The increase in demand for Gol's services has prompted the company to plan to expand its fleet of Boeing 737 aircraft to 81 by the end of 2008 from 50. While most of the company's flights are within Brazil, it also serves Argentina, Bolivia, Uruguay and Paraguay.

Varig has been shrinking as it runs out of money to pay leasing companies, airport fees and salaries after it filed for bankruptcy protection from creditors in June 2005. Its failure follows the closing of Transbrasil Linhas Aereas in 2001 and Viacao Aerea Sao Paulo in 2005.

Varig may face liquidation after creditors on Monday rejected a bankruptcy reorganization plan to sell some of its assets to its former cargo unit.

The collapse of the three Brazilian airlines enabled Gol to go after a wealthier kind of passenger than it did when it started, said Sergio Lazzarini, a professor of business administration at IBMEC College in Sao Paulo.

Initially, Gol's aim was to persuade Brazilians who traveled in long-distance buses to use its services by offering to fly them for about the same price. The reduction in the number of carriers offering more expensive services allowed Gol to move into a higher- fare market, enabling it to increase profit margins.

Currently, 61 percent of Gol's passengers are business travelers, letting the airline charge almost as much as nondiscount airlines on some routes.

"We have premier flights that don't exist in any other low-cost company in the world," Oliveira, who is Gol's chief executive, said during an interview in Sao Paulo. "These are flights that don't need price incentives."

For every dollar in revenue, Gol squeezed out 19 cents of operating income in 2005, according to company data. That compared with 11 cents for Southwest, based in Dallas, in the period, and 22 cents for Ryanair, based in Dublin, in the fiscal year ended in March.

Still, Gol's fares, coupled with a high rate of on-time departures and the lowest rate of flight cancellations among Brazil's nine domestic airlines, are low enough to attract travelers like Luiz Sakamoto, a 59-year-old engineer.

"I have been flying with Gol more frequently now because it is cheaper," Sakamoto said as he waited in Sao Paulo for a flight to Rio de Janeiro. "It doesn't have delays."

Oliveira, a former Formula Three racing driver who founded the carrier with financing from his father's bus company, said that Brazil's low wages helped trim expenses. Labor accounts for 13 percent of Gol's costs, compared with 40 percent for Southwest, he said.

Further savings are achieved by selling most tickets online and by having no frequent-flier awards program.
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Old July 20th, 2006, 10:56 PM   #131
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From: http://uk.biz.yahoo.com/20072006/323...n-dollars.html
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Thursday July 20, 08:17 PM
Varig sold to US-Brazilian investors for 24 million dollars

RIO DE JANEIRO (AFP) - A group of US-Brazilian investors bought bankrupt Brazilian airline Varig (VAGV3.SA - news) for a knockdown 24 million dollars ending weeks of uncertainty about the carrier.

The airline has been bought by the Volo do Brasil consortium made up of US investment fund Matlin Patterson and some Brazilian partners.

They were the only group to bid in an auction to sell the carrier, according to Carlos Alberto Barros, who organized the sale.

Varig was once the national carrier but it was placed under bankruptcy protection last year and since the end of June has only been flying to half of its usual destinations.
A plan by Varig's staff to buy the company collapsed last month after they failed to make the first 75 million dollar payment.
Volo do Brasil, which already owns VarigLog, the airline's former freight operation, had already put enough money into Varig to keep it flying during the past month that it will not have to pay any more to complete the purchase.
However, the deal compels the company to invest a total 485 million dollars into the airline to keep it going.
Varig has more than three billion dollars in debt, and last turned a profit in 1995. It has 13 planes left, down from 70 a year ago. There are currently about 10,600 employees but that number is expected to be drastically cut under the takeover plan.
Officially, Varig still controls 60 percent of Brazil's international routes, to 21 foreign destinations. But rivals Tam and Gol, which have lower costs and cheaper tickets, have left Varig with only 16 percent of the domestic market.
Varig was hit hard by the economic problems that dogged Brazil in the 1980s and 1990s. In 1982, when Brazil declared a foreign debt moratorium, Brazilian companies could not obtain credit from international banks.
Varig solved the problem in Japan, buying five Boeing (NYSE: BA - news) 747-300 and paying for them in yen. But the rise of the yen from the late 1980s boosted costs and the Brazilian airline incurred another 250 million dollars in debt.
A decision to freeze ticket prices between 1986 and 1991 cost the airline two billion dollars.
These problems were compounded by the buffeting of the aviation industry that followed the 1991 Gulf War. By 1994, Varig was forced to lay off 10 percent of its 29,700 employees and suspend payments for 60 days.
The airline crisis after the September 11, 2001 attacks further worsened the problems, sending it toward bankruptcy.
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Old July 22nd, 2006, 03:51 AM   #132
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Brazil vetoes Varig's plan to suspend flights
21 July 2006

RIO DE JANEIRO, Brazil (AP) - The Civil Aeronautics Agency on Friday vetoed a plan by Brazil's struggling airline Varig to suspend most flights and ordered the company to fly all its assigned routes.

Viacao Aerea Rio-Grandense SA, or Varig, must fly its five assigned national routes and five international routes, Agency President Milton Zuanazz told the government news service Agencia Brasil.

Varig, which was sold Thursday to its former subsidiary VarigLog, had announced that it was temporarily suspending all flights except for the lucractive shuttle between Rio de Janeiro and Sao Paulo.

VarigLog said late Thursday it would cancel its international flights and most domestic routes until July 28 but would increase the number of shuttles on the lucrative Rio-Sao Paulo route from 10 to 36 a week.

Varig said on its Web site that passengers with tickets for canceled flights will be transferred to other airlines and that the reduction in flights was part of a strategy to "rapidly resume growth and increase profitability."

VarigLog, controlled by the investor group Volo do Brasil, bought Varig at an auction Thursday for nearly US$500 million (euro396 million), rescuing the airline from liquidation.

Varig will operate at first with just 13 planes but hopes to increase its fleet to 80 planes within six months, Volo do Brasil said.

Varig has been in financial trouble for years, with debts of around 8 billion Brazilian reals (US$3.6 billion; euro2.9 billion).

The airline is having trouble paying for landing and departure fees and fuel for its jets. More than two-thirds of its planes are grounded as leasing companies demand their craft back and the company cannot pay for basic maintenance.

Long Brazil's leading airline, Varig has fallen behind TAM SA and Gol Linhas Aereas Inteligentes on the domestic market.
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Old July 26th, 2006, 06:43 AM   #133
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New owner of Brazil's Varig deposits payment but cancels flights
25 July 2006

RIO DE JANEIRO, Brazil (AP) - The new owner of Brazil's flagship airline Varig deposited US$75 million (euro59 million) as required to buy the struggling company but has canceled dozens of flights and stranded passengers in Brazil and abroad.

VarigLog, a former Varig subsidiary, made the deposit late Monday as part of its bid of nearly US$500 million (euro396 million), offered at auction last Thursday, to rescue the airline from liquidation.

VarigLog tried to suspend most of its national and international routes, maintaining only the lucrative shuttle between Rio de Janeiro and Sao Paulo, Brazil's biggest cities. The National Civil Aeronautics Agency, known as ANAC, vetoed the decision and ordered Varig to fly its assigned routes.

But Viacao Aerea Rio-Grandense SA, or Varig, has canceled 29 domestic and 10 international flights from Rio de Janeiro, the government news service Agencia Brasil said Tuesday.

Varig has been in financial trouble for years, with debts of around 8 billion Brazilian reals (US$3.6 billion; euro2.9 billion).

The airline is having trouble paying for landing and departure fees and fuel for its jets. More than two-thirds of its planes are grounded as leasing companies demand their craft back, and the company cannot pay for basic maintenance.

Varig's lawyer Fabio Carvalho said the airline has just 13 planes, down from 58 last December, and its monthly revenue has fallen to US$32 million (euro25 million) from US$197 (euro156) million in the same period.
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Old July 30th, 2006, 02:31 AM   #134
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Varig to slash staff by more than 50 percent

RIO DE JANEIRO, July 29, 2006 (AFP) - Brazilian airline Varig has announced it is cutting its workforce in Brazil by more than 50 percent.

The company said Friday it would slash 5,500 of its 9,485 local jobs, a week after Varig was purchased by a US-Brazilian investor group for a knockdown 24 million dollars, saving the once-proud national carrier from liquidation.

Officials said the restructuring was meant to bring staff more in line with current operational needs.

VarigLog was the only bidder in the auction for Varig, created 79 years ago to fly the flag of Latin America's largest country but now operating a bare 13 aircraft.

VarigLog said that after July 28, it would "gradually" resume flights to the 11 foreign destinations and 12 Brazilian ones the airline served as of last Thursday.

Varig was hit hard by the economic problems that dogged Brazil in the 1980s and 1990s.

In 1982, when Brazil declared a foreign debt moratorium, the company was forced to finance new aircraft purchases in Japanese yen, which cost it heavily when the yen sharply revalued several years later.

A decision to freeze ticket prices between 1986 and 1991 cost the airline two billion dollars.

Its bad luck was compounded by the buffeting of the aviation industry that followed the 1991 Gulf War. By 1994, Varig was forced to lay off 10 percent of its 29,700 employees and suspend payments for 60 days.

The airline crisis after the September 11, 2001 attacks further worsened the problems, steering Varig toward bankruptcy.
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Old August 1st, 2006, 08:40 PM   #135
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Brazil's Varig airline struggles as court orders payment to workers
By ALAN CLENDENNING
1 August 2006

SAO PAULO, Brazil (AP) - The future of troubled airline Viacao Aerea Rio-Grandense SA, or Varig, was once again in doubt Tuesday after a court ordered a US$75 million (euro60 million) cash infusion to be used to pay workers and another Brazilian airline stopped honoring the carrier's international tickets.

The money provided by Varig's new owner, Volo do Brasil, was a first installment toward buying the airline and had been earmarked to pay operating debts and keep the carrier aloft while it reorganizes.

But a Rio de Janeiro labor court issued an injunction late Monday ordering the company to use the cash to pay employees, some of whom haven't received a paycheck for months.

Separately, Tam Linhas Aereas SA informed Brazil's National Civil Aviation Authority it will stop honoring Varig tickets for international routes.

Varig ticket holders had been using TAM to return to Brazil from London, Paris, New York and other cities where Varig either eliminated or reduced service since last month.

But TAM said it is now owed some US$1.5 million (euro1.2 million) by Varig and won't honor any more tickets because payment negotiations haven't been resolved.

Many Varig passengers had already been forced to spend days in airports reworking travel arrangements, with the airline refusing to pay for hotels, food and transportation. TAM's decision was likely to make it even more difficult for them to arrange return flights.

The suspension of many international Varig flights has also driven up the cost of flying to and from Brazil because other airlines' planes are fuller than normal. Round-trip tickets that once cost US$1,000 (euro800) to US$1,500 (euro1,200) now run as much as US$3,000 (euro2,350) -- when seats are available.

Varig declined to comment Tuesday, saying it had not been officially notified of the court ruling or TAM's decision.

Volo is trying to reorganize Varig, once Brazil's flagship airline, as a smaller company. As of last Friday, Varig was flying only 10 planes out of a former fleet of 65 jets.

The company last week announced it would cut its work force by 60 percent, or some 5,500 employees. The layoffs were widely expected following Varig's sale for US$500 million (euro390 million) to Volo, whose investors include the U.S.-based investment fund Matlin Paterson.

Volo, which is also owner of Varig's former cargo subsidiary VarigLog, had hoped to restore operations by paying debts with airports and fuel suppliers, but the injunction raises questions about whether the owners will want to inject more cash.

The sale must still be approved by Brazil's aviation authority.

Varig has been in financial trouble for years, with debts of some US$3.6 billion (euro2.8 billion). Under the restructuring plan, most of the debts, including labor obligations, wouldn't be honored by the new owners.

While Varig remained Brazil's main carrier on international routes during the bankruptcy proceedings, it fell far behind rivals TAM and Gol Linhas Aereas Inteligentes SA in Brazil's extensive domestic market. TAM is still honoring Varig tickets on domestic routes.

Varig now flies to only seven Brazilian cities and has limited international service to Buenos Aires, Argentina; Frankfurt, Germany; Miami; and New York.
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Old August 5th, 2006, 05:00 AM   #136
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Brazil's Varig airline plans to resume routes, fly 45 jets by end of 2006
By ALAN CLENDENNING
4 August 2006

SAO PAULO, Brazil (AP) - Brazil's struggling Varig airline said it plans to soon resume service to some domestic and international routes suspended since June and boost its fleet of 12 jets to 45 by the end of the year.

The carrier hopes to have five more jets flying by next week after virtually disintegrating over the last several months amid mass flight cancellations at the end of a bankruptcy reorganization process.

The move would allow it to hire back some of the 5,500 workers who were laid off as the airline restructures, according to Marco Antonio Audi, who leads an investor group that bought Varig at a bankruptcy auction in July. The sale of Varig still must be approved by Brazil's National Civil Aviation Authority.

Audi, speaking to reporters in Rio de Janeiro, said Varig will first serve domestic destinations and the international destinations of Buenos Aires, Argentina; Caracas, Venezuela; and Frankfurt, Germany.

Then as Varig puts more planes in the air, the company will start resuming flights to destinations such as London; Milan, Italy; Miami and New York. The company will need 120 workers for each plane, and Audi predicted the company could have a total work force of 5,400 by the end of the year, compared to 9,485 before last week's layoffs were announced.

But in a twist that could complicate Varig's plans, the chief executive of Brazil's Tam Linhas Aereas SA told analysts Friday that the carrier is interested in routes Varig has stopped operating from Brazil to Milan and Paris.

Tam's Marco Antonio Bologna said his airline has agreements with leasing companies to supply new Airbus A330 jets within four months to fly the routes.

Volo must separately present its plan to restart suspended routes to the National Civil Aviation Authority, which could approve it or decide to redistribute Varig routes to other carriers.

By 2008, Audi said, Varig plans to have a fleet of 75 planes -- 10 more than the company had before it drastically reduced service in June as the bankruptcy proceedings dragged on and the airline ran short of money to pay for fuel and airport fees.

Audi spoke after a Brazilian bankruptcy judge overturned a court injunction blocking a US$75 million (60 million) cash infusion into Varig, the country's flagship airline. Late Friday, Brazil's Supreme Court upheld the bankruptcy judge's ruling.

The money provided by Audi's group, Volo do Brasil, was a first installment toward buying the airline and is earmarked to pay operating debts and keep the carrier aloft while it reorganizes.

The US$75 million (59 million) was the first installment of investments totaling US$500 million (390 million) pledged by Volo, which counts U.S. investment fund Matlin Paterson among its partners.

Varig has been in financial trouble for years, with debts of some US$3.6 billion (2.8 billion). Under the restructuring plan, most of the debts, including labor obligations, wouldn't be honored by the new owners.

Since June, aviation analysts say, Varig's main Brazilian rivals Tam and Gol Linhas Aereas Inteligentes SA have sharply increased their market share in Brazil's huge domestic market and to a lesser degree on international routes.

The impact of Varig's reduced service has also sent prices much higher for travel to and from Brazil.

Prices of economy round trip tickets to Brazil from Europe and the United States have increased from US$1,000 to US$1,500 (780 to 1,170) to as much as US$3,000 (2,345).
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Old August 9th, 2006, 03:10 AM   #137
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Brazilian jet lands safely after door falls off

RIO DE JANEIRO, Brazil, Aug 8 (Reuters) - A jet owned by leading Brazilian airline TAM landed safely on Tuesday after one of its doors fell off and crashed to earth next to a supermarket shortly after departure from Sao Paulo.

No one was hurt in the incident, a TAM spokeswoman said. The Fokker 100 plane with 79 people aboard en route to Rio de Janeiro returned to the airport safely 18 minutes after taking off.

TAM has been replacing its Fokker planes since the Dutch aircraft maker went bankrupt 10 years ago. It still has 22, but expects to gradually eliminate all of them by 2010.

The same type of plane, also operated by TAM, caused one of Brazil's worst air disasters in 1996. It crashed in an urban area shortly after taking off from Sao Paulo, killing about 100 people, including some on the ground.

In 1997, an explosion of undetermined origin killed a passenger who was blown out of a TAM Fokker 100 during flight. In 2001 an engine breakup on a TAM Fokker 100 caused two cabin windows to shatter and one of 82 passengers aboard died as a result of the depressurization.
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Old August 17th, 2006, 01:03 AM   #138
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Brazil to finance domestic sales of Embraer jets

RIO DE JANEIRO, Aug 16 (Reuters) - Brazil's state-owned development bank said on Wednesday it would offer a special credit line to domestic airlines that want to buy passenger jets made by home-grown plane maker Embraer.

In addition to Embraer , the measure could also benefit Brazilian carrier Varig , the new owners of which recently expressed interest in buying Embraer planes.

"Since last year, we have been working with Brazilian airlines and with the aircraft industry to create credit lines and financial instruments that encourage airlines to invest in Brazilian-made aircraft," Demian Fiocca, the bank's president, said at an event in Rio de Janeiro.

Fiocca said the development bank, known as BNDES, could finance up to 85 percent of the cost of each plane.

Embraer was not immediately available to comment on the new credit line.

Brazil's leading airline, TAM Linhas Aereas , has also expressed interest in acquiring some planes from Embraer as it seeks to serve more regional routes.

Embraer, short for Empresa Brasileira de Aeronautica, is the world's fourth-largest civil aircraft manufacturer, with clients in Asia, Europe, the Americas and the Middle East. It specializes in long-range regional jets in the 70- to 100-seat niche, and also makes military aircraft and business jets.

But for all its success overseas, Embraer has struggled to sell passenger jets in Brazil, in large part due to high interest rates and a heavy tax burden.

Most Brazilian airlines are customers of Boeing Co. and Airbus , giving them access to cheaper credit in foreign markets where they tend to pay interest based on the London interbank offered rate, or Libor.

Embraer's main rival in the regional jet market is Canada's Bombardier Inc. , which only makes longer versions of its old-style 50-seat commuter planes that seat up to 86 passengers. (Additional reporting by Cesar Bianconi in Brasilia)
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Old October 1st, 2006, 04:38 AM   #139
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Brazil: Low-fare carrier Gol airplane crashes

Brazil mourns air crash victims

Brazilian President Luis Inacio Lula da Silva has declared three days of national mourning after the crash of a passenger plane with 155 people aboard.
There is no sign of survivors at the crash site in the Amazonian state of Mato Grosso, the air force said.

Soldiers dropped into the remote area have been clearing dense vegetation so that helicopters can land.

The Boeing 737 was flying from Manaus to the capital, Brasilia, when it vanished from radar screens on Friday.

Aviation officials are investigating the possibility that it collided with a smaller plane.

Disaster record

If no survivors are found, Friday's crash would become the worst air disaster in Brazil's history.

The plane was operated by the budget airline Gol.

"It would be very difficult for anyone to survive such a crash," Jose Carlos Pereira, president of the Brazilian airport authority, told journalists.



"Our experience shows that when one cannot find the fuselage relatively intact and when the wreckage is concentrated in a relatively small area, the chances of finding any survivors are practically non-existent," he added.

A Gol airline statement state said the wreckage had been found 30 km (19 miles) north of the town of Peixote Azevedo.

Dozens of anxious relatives and friends of those missing have gathered at airports in Brasilia, Rio de Janeiro and Manaus, seeking information about their loved ones.

Initial reports said the airliner collided with a smaller private plane, but aviation officials now say this cannot be confirmed.

It had been scheduled to fly on to Rio de Janeiro from Brasilia.

Gol has expanded rapidly in recent years to become Brazil's number two carrier.

This is the first major crash involving Gol, which was founded in 2001.

Gol says the plane involved was new, having come into service this month.



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Old October 4th, 2006, 08:25 AM   #140
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Brazilian authorities seize passports of pilots from jet that collided with airliner
By PETER MUELLO

RIO DE JANEIRO, Brazil (AP) - A Brazilian court ordered police to seize the passports of two U.S. pilots whose executive jet clipped a commercial plane in midair last week shortly before the larger aircraft crashed, killing all 155 people onboard, a spokeswoman said.

Meanwhile, a Brazilian newspaper reported on Tuesday that the Brazilian-made Legacy executive jet, which was carrying seven Americans, disobeyed an order by the control tower to descend to a lower altitude just before coming into contact with Gol airlines Flight 1907.

The daily O Globo paper said the Legacy flew at 37,000 feet (11,300 meters) to the capital Brasilia, but then ignored an order to descend to 36,000 (11,000 meters) feet to continue its flight to the Amazon city of Manaus. The Gol jetliner was flying at 37,000 feet (11,300 meters) from Manaus to Brasilia en route to Rio de Janeiro.

The executive jet was damaged but landed safely at a nearby air force base.

A judge in Mato Grosso state, where the Gol plane crashed deep in the Amazon jungle, ordered police to seize the passports of Legacy pilot Joseph Lepore and co-pilot Jan Palladino "as a result of the doubts surrounding the case and the emergence of indications that the accident was caused by the Legacy," state Justice Department spokeswoman Maria Barbant said.

She said the two were not arrested but "just prevented from leaving the country, at least until we know exactly what happened."

The pilots, who have been questioned by Mato Grosso investigators, were brought to Rio de Janeiro on Tuesday for routine physical tests. They were not injured in the incident.

The Legacy had been making its inaugural flight to the United States, where it had been purchased by an American company, said its manufacturer, Embraer.

Air force commander Gen. Luis Carlos Bueno also said the Gol flight, a brand-new Boeing 737-800, had a flight plan for 37,000 feet (11,300 meters) and the Legacy jet was authorized to fly at 36,000 feet (11,000 meters), according to an interview Tuesday with Brazil's government news service Agencia Brasil.

He said neither plane was authorized to deviate from the plans. He said only an investigation of the planes' black boxes could clarify the cause of the accident.

Neither the air force nor the National Civil Aviation Agency would comment to The Associated Press on the reports.

Christine Negroni, an investigator for the aviation law firm Kreindler & Kreindler of New York, said in an e-mail that under international guidelines, westbound planes are supposed to fly at even-numbered altitudes, and eastbound planes at odd-numbered altitudes, as measured in feet.

"Since the American pilots were flying northwest, they should not have been at 37,000 (feet) since that's odd," she said.

Investigators began examining voice and data recorders recovered from the jetliner Tuesday, but the National Civil Aviation Agency said one of the voice recorders was missing a database.

"This unit is essential for analysis," the agency said on its Web site. It said military units were searching for the missing parts.

Investigators will also question why the pilots weren't alerted by special on-board equipment designed to avoid collisions. The air force said both jets were equipped with a Traffic Collision Avoidance System, or TCAS, which sets off an alarm if other planes get too close.

The Gol plane crashed deep in the Amazon jungle near Peixoto de Azevedo in Mato Grosso state, some 1,100 miles (1,770 kilometers) northwest of Rio de Janeiro, killing all 149 passengers and six crew members.

Among the dead was U.S. citizen Douglas Hancock, 35, of Missouri. He was in Mato Grosso for business and was returning to Rio de Janeiro where he lived, his father, Paul Hancock, told the Southeast Missourian newspaper.
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