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Rumour: RG Looking At Merger With TAM?  
User currently offlineKaitak From Ireland, joined Aug 1999, 13265 posts, RR: 34
Posted (13 years 4 months 2 weeks 4 days 18 hours ago) and read 2610 times:

I read a rumour today, on one of the yahoo groups that RG was looking at a merger with TAM. Varig, as you may be aware, is going through a very bad time at the moment and there is/was a distinct possibility it could go "belly up". This would, of course, be a tragedy, not least because Varig is a VERY fine airline and is effectively Brazil's flag carrier, being the most widely known Brazilian airline abroad. It has recently cancelled orders for four 777s.

Perhaps some of our Brazilian readers might be able to assist with this?

If this did happen, what name would it take? Would it simply amount to a takeover by TAM of Varig's intercontinental routes, thus the VARIG name would disappear? What kind of fleet would we be looking at? I would have to guess it would be mostly Airbus. The MD11s and 767s would probably be replaced by more A330-200s and the combined carrier would probably introduce A340-300s, possibly even A340-5/600s in time to come.

Whatever the outcome, RG is in very serious trouble and with the Brazilian economy not doing well and the new president, Lula, focusing on poverty and social issues, there's unlikely to be any government aid to get it out of its problems.

4 replies: All unread, jump to last
User currently offlineBackfire From Germany, joined Oct 2006, 0 posts, RR: 0
Reply 1, posted (13 years 4 months 2 weeks 4 days 18 hours ago) and read 2603 times:

Varig has today categorically denied that any such merger is being considered.

User currently offlineChepos From Puerto Rico, joined Dec 2000, 6383 posts, RR: 10
Reply 2, posted (13 years 4 months 2 weeks 4 days 17 hours ago) and read 2570 times:

It is a rumor with no foundation,- TAM taking over or merging with Varig would not be a very smart move on TAM's behalf.

Fly the Flag!!!!
User currently offlineBa319-131 From United Kingdom, joined Jan 2001, 8743 posts, RR: 53
Reply 3, posted (13 years 4 months 2 weeks 4 days 15 hours ago) and read 2542 times:
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The whole thing has 'Disaster' written all over it!

RG are in deep trouble,TAM are holding their own considering the terrible market conditions they are operating in.

None of their fleet match.

It would be a disaster for both airlines.

Besides,i'd rather TAM survived.



User currently offlineCiro From Brazil, joined Aug 1999, 662 posts, RR: 6
Reply 4, posted (13 years 4 months 2 weeks 3 days 23 hours ago) and read 2500 times:


Even though a merger could bring synergies in the long run, it is very unlikely to happen. TAM doens't want to holds and would not manage Varig's debts... RG is in a much worse financial situation and it is impressive it did not go belly-up yet!

Brazil cannot afford two major carriers. I foresee a future where Varig will go bankrupt and TAM will emerge as Brazil's national airline.

Life is tough... But hey! Canada and Australia went through this, so maybe, it is our turn now.


The fastest way to become a millionaire in the airline business is to start as a billionaire.
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