Glennpower From Brazil, joined Jul 2004, 102 posts, RR: 0 Posted (8 years 1 month 2 days 2 hours ago) and read 1397 times:
I have just read in the Brazilian magazine AERO that Unibanco and Trevisan (consultancy firm to RG),asked the Brazilian government to defer for 240 months (20 years) all monies owed,which including all creditors now stands at over 9 Billion Reais ,approximately 3.4 billion US dollars.
I have heard that RG must pay US$200,000 every day just in interest payments,no wonder the service is so bad,mainly as a result of extreme incompetence by the Ruben Bertha foundation over recent years,especially
a very stubborn person in Yutaka Imagawa who thankfully is no longer there.
As I have said before they should never have gotten rid of Fernando Pinto,now doing a top job at Tap.
The Varig Novela (soap opera in Portuguese) continues.
Senorcarnival From , joined Dec 1969, posts, RR: Reply 4, posted (8 years 1 month 2 days 1 hour ago) and read 1320 times:
How does VARIG manage to stay afloat in all this debt while their one-time competitors are now long gone? Maybe I don't have my figures right, but was TransBrasil and VASP's debt bigger?
I don't mean to be cynical, but is the government giving them a break as VARIG is pretty much synonymous with Brazilian aviation so for the sake of keeping the appearances of some semblance of success they'll give them a break?
PPVRA From Brazil, joined Nov 2004, 8492 posts, RR: 43 Reply 6, posted (8 years 1 month 2 days 1 hour ago) and read 1304 times:
Quoting Senorcarnival (Reply 4): How does VARIG manage to stay afloat in all this debt while their one-time competitors are now long gone?
TAM is RG's new competitor, along with GOL.
Quoting Senorcarnival (Reply 4): Maybe I don't have my figures right, but was TransBrasil and VASP's debt bigger?
Not in terms of units, but they closed doors because they simply ran out of cash and could not afford fuel.
Quoting Senorcarnival (Reply 4): I don't mean to be cynical, but is the government giving them a break as VARIG is pretty much synonymous with Brazilian aviation so for the sake of keeping the appearances of some semblance of success they'll give them a break?
Some people claim so, but so far the government hasn't given them a nickel. Some 60% if I'm not mistaken of RG's debt is with the government. Also, RG won a lawsuit against the government worth some R$ 3 billion, which should cut their total debt by a third.
The government has repeatedly stated that they are in favor of a "market solution" for Varig. Currently, RG has 7 investors interested in acquiring the airline.
Cheers,
PPVRA
[Edited 2005-04-18 23:03:06]
"If goods do not cross borders, soldiers will" - Frederic Bastiat
FMAL From Brazil, joined Jan 2004, 486 posts, RR: 1 Reply 7, posted (8 years 1 month 2 days 1 hour ago) and read 1282 times:
Aviation is a strategic market to any nation. I think the Brazilian Govt with its interests abroad is doing the right thing if they're giving Varig a break, which they're really not....maybe they're going lighter on Varig then they did with Vasp, but still....if the Govt decided to forgive Varig's debt, they'd be loosing far, far less money then what they did for the Banks, now posting perennial record profits. The Govt, through its state owned companies such as Infraero (airports) and BR Distribuidora (Fuel) demand that Varig pays their rates for airport and fuel daily, cash deposit.....that's putting a strangle hold on Varig's throat, as they're having cash flow difficulties (imagine over 2 million dollars leaving your account every single day....).
But, they're not alone.....I think its amazing just how high airline costs are, particularly in Brazil, where bureaucracy, high rates and taxation are trademarks....
Jetdeltamsy From United States of America, joined Nov 2000, 2984 posts, RR: 8 Reply 8, posted (8 years 1 month 2 days ago) and read 1250 times:
$3.4 billion US is a huge debt for Varig. Massive.
Varig is like Alitalia, Olympic or other similar financial basket cases that always seem to get that "final" financial bailout by their local government.
i have experienced their service a couple of times between the US and Brazil. Business class and economy...service both ways was very good, the aircraft were clean, everything worked.
Worked for too many airlines to list. Banktupcy after bankruptcy after bankruptcy.
Senorcarnival From , joined Dec 1969, posts, RR: Reply 9, posted (8 years 1 month 2 days ago) and read 1248 times:
Quoting PPVRA (Reply 6):
TAM is RG's new competitor, along with GOL.
Right, I knew that. I was reffering to VASP and TransBrasil.
Quoting PPVRA (Reply 6): Some people claim so, but so far the government hasn't given them a nickel. Some 60% if I'm not mistaken of RG's debt is with the government. Also, RG won a lawsuit against the government worth some R$ 3 billion, which should cut their total debt by a third.
Well, perhaps not in terms of giving them financial compensation, but I was mostly refering to just a break, like, "hey buddy, we know times are tough, we'll take it easy on you." But appearently that does not seem to be the case?
PPVRA From Brazil, joined Nov 2004, 8492 posts, RR: 43 Reply 10, posted (8 years 1 month 2 days ago) and read 1233 times:
Quoting Senorcarnival (Reply 9): Well, perhaps not in terms of giving them financial compensation, but I was mostly refering to just a break, like, "hey buddy, we know times are tough, we'll take it easy on you." But appearently that does not seem to be the case?
Ok, I get you. But no, not even a break (TAm and GOL would be kicking and screaming if that was the case, and rightly so ). As FMAL stated above, Infraero and BR (Aviation fuel destributor) are after RG for every penny, and they want it on time. Infraero almost had to sue Varig last year for several million USD because RG failled to present a viable plan to finance their debts. In the last minute, RG got a plan approved by Infraero and the lawsuit was avoided.
I believe a similar lawsuit was filed against VASP last year.
I don't want to sound like I'm making as excuse here, RG's management MUST go. Apparantly they are on their way out as soon as the new invstor is announced.
Cheers,
PPVRA
"If goods do not cross borders, soldiers will" - Frederic Bastiat
Senorcarnival From , joined Dec 1969, posts, RR: Reply 11, posted (8 years 1 month 1 day 23 hours ago) and read 1203 times:
I remember growing up and one of my mom's best friend was some sort of big wig at RG and it just sounded like those were glory days. These days, this guy hasn't worked at RG for nearly ten years and the glory days seem to be far from over.
I agree with you. I don't think that your impression of bad mgmt is very far off. I don't have enough fingers to keep track of how many companies have been ruined by bad management.
YUL332LX From Canada, joined Feb 2004, 820 posts, RR: 1 Reply 12, posted (8 years 1 month 1 day 23 hours ago) and read 1181 times:
Quoting Glennpower (Thread starter): all monies owed,which including all creditors now stands at over 9 Billion Reais ,approximately 3.4 billion US dollars.
Are RG's debts denominated mostly in Reais or US$?
E volavo, volavo felice più in alto del sole, e ancora più su mentre il mondo pian piano spariva lontano laggiù ...
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Sad indeed for the employees and the airlines.
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