Brazil’s Varig at the End of Its Rope. It Might Stop Flying Any Minute Now.

Varig Brazilian Airlines on its last legThe president of Brazil’s debt-burdened flagship airline Varig acknowledged Wednesday, April 5, that his company was running short on cash, but said there was no risk its money woes would soon force it out of the skies.

Marcelo Bottini said Viação Aérea Rio-Grandense SA, or Varig would not be grounded in the near term, despite juggling more than US$2 billion in debt and facing federal demands for payments.

Bottini’s comments came in response to reports in the financial daily Valor and O Globo newspaper that the airline’s financial problems would force it to suspend its flights as early as today, for failing to pay maintenance and airport bills on time, breaking agreements made earlier this year.

Bottini said he had asked to meet with President Luiz Inácio Lula da Silva to discuss plans to rescue the ailing company, which already is operating under bankruptcy protection.

He also said he was seeking a line of credit to cover airport fees and fuel costs, to help the airline through Brazil’s off-season.

Varig owes the federal airport administration some US$ 54 million and spends about US$ 422,000 to cover its airport fee each day.

Creditors appeared to reject an offer from Volo do Brasil, which purchased the airline’s former cargo subsidiary VarigLog in January for US$ 46 million.

Volo do Brasil had offered to buy Varig for US$ 350 million, without taking responsibility for any of the company’s debts. Under the proposed deal, Volo do Brasil was expected to lay off about half of the airline’s 10,000 employees.

Mercopress

Tags:

Ads

You May Also Like

Only End of Land Disputes Will Solve Indian Problems in Brazil

A new pediatric unit, with 20 beds, was inaugurated earlier this month at the ...

Talent Is Good, But You Need a Team to Win the Cup, Says Brazil’s Coach

What needs to win World Cup title? Brazil coach Carlos Alberto Parreira is sure, ...

Best-seller Books, Plays and Movies

By Brazzil Magazine PLAYS RIO Os Ratos do Ano 2030 (The Mice from the ...

Brazil Expecting the World from Venezuela

Venezuela has joined Mercosur, a free trade zone commonly known as the Southern Common ...

Shrinking Lasted Only Three Months. Brazil Is Growing Again

The Brazilian economy grew at its fastest pace in over a year and a ...

How My Beautiful and Brazen Friend Became a Goddess of Global Buddhism in Brazil

In 1978, one of the most beautiful and compelling friends I’ve ever had was ...

English for Brazucas

Another feature of English that often is a puzzle to speakers of other languages—particularly ...

Brazilian Market Rebounds Despite Fears That Lula Might Be Tainted by Corruption

Latin American shares mostly rebounded, led by Brazil’s return to positive territory, following a ...

FAO’s Map Is Not Pretty Picture for Brazil and the Amazon

Expanding livestock production is one of the main drivers of the destruction of tropical ...

Glorious Leaps

In 1952 in Helsinki, Adhemar was continuously cheered by the public on a memorable ...