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Air Canada Buying A Stake Of Varig  
User currently offlineBrasuca From Brazil, joined Mar 2004, 717 posts, RR: 11
Posted (7 years 11 months 1 week 6 days 12 hours ago) and read 10809 times:

AC is expected to make public tomorrow, FRI, 25 AUG, they are buying a stake of 10% in New Varig.
This 10% is part of Matlin Patterson's current 20% of VARIG.

Reasons for the investment: Air Canada will transfer to VARIG some of their 767s and some of their delivery slots at Embraer.

http://br.invertia.com/noticias/noti...dNoticia=200608241324_INV_29899414

Edit: Typo

[Edited 2006-08-24 16:41:02]


Varig, Varig, Varig
65 replies: All unread, showing first 25:
 
User currently offlineSalomon From Canada, joined Jun 2006, 205 posts, RR: 0
Reply 1, posted (7 years 11 months 1 week 6 days 12 hours ago) and read 10770 times:

Quoting Brasuca (Thread starter):
Air Canada will transfer to VARIG some 767 and some of their delivery slots of E190.

Are the transfered E190 delivery slots from the firm order or the options?



Takeoffs are optional; landings are mandatory.
User currently offlineHardiwv From Brazil, joined Oct 2004, 8780 posts, RR: 50
Reply 2, posted (7 years 11 months 1 week 6 days 12 hours ago) and read 10745 times:

Nadson:

Tks for the breaking news. There were strong rumours that AC wanted to buy a stake in RG. This development is very interesting and means that indeed RG (or Nova Varig) will come back to fly high.

Very interesting development and I'm sure AC has carefully studied the situation of RG and the domestic Brazilian market before getting involved in this business.

Rgs,


User currently offlineHardiwv From Brazil, joined Oct 2004, 8780 posts, RR: 50
Reply 3, posted (7 years 11 months 1 week 6 days 12 hours ago) and read 10745 times:

Quoting Salomon (Reply 1):
Are the transfered E190 delivery slots from the firm order or the options?

Delivery slots. The news mentioned that AC will transfer to RG about 6 delivery slots of the E190 scheduled to be delivered to AC.

Very interesting.....

Rgs,


User currently offlineSTEELHEAD From Canada, joined Nov 2005, 130 posts, RR: 0
Reply 4, posted (7 years 11 months 1 week 6 days 12 hours ago) and read 10727 times:

Smart move to spend some of the profit from the US deal to help a partner.
If RG survives, AC again will make a huge profit within a shart time.


User currently offlineSQuared From Canada, joined May 2005, 387 posts, RR: 0
Reply 5, posted (7 years 11 months 1 week 6 days 12 hours ago) and read 10692 times:

First US, then RG... AC is quickly becoming Star's 'saviour' airline. The investment will likely echo the investment in US, (buy then sell for a profit). But I'm wishfully hoping this turns out to be a long-term comprehensive partnership (like KL-NW)

Does Brazil have a foreign equity cap on airlines?

SQuared


User currently offlineHardiwv From Brazil, joined Oct 2004, 8780 posts, RR: 50
Reply 6, posted (7 years 11 months 1 week 6 days 12 hours ago) and read 10680 times:

I got more precise information on the deal.

Apparently AC and TAP joined hands with US Fund Brooksfield to make a bid to buy a stake in RG. It seems an interesting deal will emerge very soon.

Representatives of TAP Portugal, Air Canada and US fund Brooksfield met yesterday at the headquarters of Varig SA, generating speculation that they could work together on a bid for the troubled Brazilian airline".


http://www.forbes.com/markets/feeds/afx/2006/06/13/afx2811359.html

[Edited 2006-08-24 16:55:58]

User currently offlineAF454GRU From France, joined Aug 2006, 40 posts, RR: 1
Reply 7, posted (7 years 11 months 1 week 6 days 12 hours ago) and read 10635 times:

Great news for Varig!
Hope to them back to the business shortly!
RG was - or still is, a World Class airline and deserve its place on the market!


User currently offlineSQuared From Canada, joined May 2005, 387 posts, RR: 0
Reply 8, posted (7 years 11 months 1 week 6 days 12 hours ago) and read 10635 times:

A link in English:

http://www.easybourse.com/Website/dy...wsID=46100&lang=fra&NewsRubrique=2

It answers my own question-- cap is set at 20%.

SQuared


User currently offlineWINGS From Portugal, joined May 2005, 2831 posts, RR: 68
Reply 9, posted (7 years 11 months 1 week 6 days 12 hours ago) and read 10606 times:

Quoting Hardiwv (Reply 2):
Tks for the breaking news. There were strong rumours that AC wanted to buy a stake in RG. This development is very interesting and means that indeed RG (or Nova Varig) will come back to fly high.

These latest developments will surely allow for Varig to rise from the ashes. Fingers crossed.

Quoting Hardiwv (Reply 6):

Apparently AC and TAP joined hands with US Fund Brooksfield to make a bid to buy a stake in RG. It seems an interesting deal will emerge very soon.

resentatives of TAP Portugal, Air Canada and US fund Brooksfield met yesterday at the headquarters of Varig SA, generating speculation that they could work together on a bid for the troubled Brazilian airline".

This update makes things even more interesting. Both Tap Portugal and Air Canada have alot to gain with a strong Varig. Hopefully with the background knowledge of Mr Fernando Pinto Tap along with Air Canada will give Varig a helping hand.

Regards,
Wings



Aviation Is A Passion.
User currently offlineKrisYYZ From Canada, joined Nov 2004, 1593 posts, RR: 0
Reply 10, posted (7 years 11 months 1 week 6 days 12 hours ago) and read 10606 times:

Great news, but I thought AC is still in need of B767's, they leased additional aircrafts just last year.

anyword if they will be -300ER or 200ERs?

KrisYYZ


User currently offlineLeelaw From , joined Dec 1969, posts, RR:
Reply 11, posted (7 years 11 months 1 week 6 days 12 hours ago) and read 10585 times:

SAO PAULO (Dow Jones)--Air Canada is expected to announce shortly it will buy a stake in Brazil's embattled airline Viacao Aerea Rio-Grandense, or Varig, according to the local daily O Estado de S. Paulo.

According to unnamed sources, Air Canada, via its parent company ACE Aviation Holdings (ACE.B.T), is in talks to buy a 10% stake in the new Varig.

Last month, Volo do Brasil, a group of investors involving U.S. fund Matlin Paterson, bought the operations of Varig, rescuing the former flagship airline from a possible bankruptcy. Volo has pledged $500 million to allow the company to pay operating debts.

However, Air Canada's involvement in the deal is dependent on approval of the Volo purchase by local aviation authorities. The National Civil Aviation Agency, or Anac, is expected to rule on the deal Friday, according to the report...

...Currently, the company is only flying around 12 planes and a small portion of its former routes.

According to the report, the draft deal involves transferring part of Air Canada's Boeing 767 fleet to Varig. In addition, Air Canada will transfer at least six orders for E190 planes with local aircraft manufacturer Empresa Brasileira de Aeronautica SA (ERJ), or Embraer...

...However, Air Canada's involvement in Varig would still need to be approved by Anac. Brazilian law limits foreign interest in airlines to 20%. U.S. investment fund Matlin Paterson is a key investor in Volo.


http://online.wsj.com/article/BT-CO-20060824-708493.html


User currently offlineHardiwv From Brazil, joined Oct 2004, 8780 posts, RR: 50
Reply 12, posted (7 years 11 months 1 week 6 days 12 hours ago) and read 10558 times:

Quoting WINGS (Reply 9):
This update makes things even more interesting. Both Tap Portugal and Air Canada have alot to gain with a strong Varig. Hopefully with the background knowledge of Mr Fernando Pinto Tap along with Air Canada will give Varig a helping hand.

Agree. TAP, AC and StarAlliance partner airlines in general need a strong partner in GRU. I would even go as far as saying that part of TP's future and tied to RG's fate. I am also sure that Fernando Pinto will lend his expertise in reviving RG. Nobody else knows RG better.

Rgs,


User currently offlineFLYACYYZ From Canada, joined Jan 2004, 1914 posts, RR: 12
Reply 13, posted (7 years 11 months 1 week 6 days 11 hours ago) and read 10420 times:

Interesting........

I would suspect the 763's being considered for transfer in the "New Varig". Wonder how this will impact AC's own operation as they are already strapped for aircraft, and the replacement aircraft (787) is almost 4 years away.

Our CEO recently stated that marketing is taking a hard look at GRU for AC expanded operations.

Two of our currently leased 763's are ex Varig/ex Canadian, and would suspect that for compatibility reasons, these could be the likely candidates.

AC made a bundle of $$$ in its investment in CO, US, and RG will be no different.



Above and Beyond
User currently offlineSTEELHEAD From Canada, joined Nov 2005, 130 posts, RR: 0
Reply 14, posted (7 years 11 months 1 week 6 days 11 hours ago) and read 10340 times:

Has AC still some 767-200's (non ER) parked in the desert ?

This might be a good idea to use these planes - cheap and no problem with
current AC operations.

Any idea, which planes AC still has parked ?


User currently offlineJetlanta From United States of America, joined Jul 2001, 3258 posts, RR: 35
Reply 15, posted (7 years 11 months 1 week 6 days 10 hours ago) and read 10309 times:

Quoting FLYACYYZ (Reply 13):

TAM and Gol might have something to say about that. Varig has disintegrated far worse than CO or US ever did. It is going to be very difficult for Varig to come back, given the network gains of TAM and Gol, as well as their far superior customer preference. TAM has the premium niche. Gol has the discount niche. What does Varig have left, other than history?

Not saying it won't happen, but this is not a no-brainer for ACE.


User currently offlineSebring From Canada, joined Jul 2004, 1663 posts, RR: 14
Reply 16, posted (7 years 11 months 1 week 6 days 10 hours ago) and read 10263 times:

Quoting Jetlanta (Reply 15):
TAM and Gol might have something to say about that. Varig has disintegrated far worse than CO or US ever did. It is going to be very difficult for Varig to come back, given the network gains of TAM and Gol, as well as their far superior customer preference. TAM has the premium niche. Gol has the discount niche. What does Varig have left, other than history?

Not saying it won't happen, but this is not a no-brainer for ACE.

In each of its investments, there were common characteristics. Each was an airline coming out of a bankruptcy restructuring. Each offered AC some side benefits - a good alliance, maintenance contracts, etc. In Varig's case, one inducement could be to facilitate AC's ongoing fleet restructuring. It could be that ACE believes it ordered too many 190s, or is taking delivery of the right amount in too short a timeframe. Moving six planes off ACE to RG would be viewed positively by financial markets, given ACE's huge new aircraft commitments. Alternatively, if ACE is finding a home for 767s, it raises the question of whether ACE will be looking to make more of its 787 options firm. And it's not out of the realm of possibility that the 787s will come earlier than planned, depending on what Boeing has available as it speeds up the line and firms up other orders.

In that sense, ACE always covers its options, to use financial jargon, to offset the risk. If the 10% stake goes down the drain, it can always point to maintenance contracts, or a fleet deal, that generated a benefit with an equal or equivalent value to the written off equity.

No, not a slam dunk, but also not a big risk.


User currently offlineGr8Circle From Canada, joined Dec 2005, 3097 posts, RR: 4
Reply 17, posted (7 years 11 months 1 week 6 days 10 hours ago) and read 10237 times:

For a change, a Canadian company is buying into a foreign one....of late, we were only seeing foreing companies buying out Canadian companies.....  Big grin

User currently offlineKrisYYZ From Canada, joined Nov 2004, 1593 posts, RR: 0
Reply 18, posted (7 years 11 months 1 week 6 days 10 hours ago) and read 10194 times:

Well is AC is going to transfer some of its B767 to RG now would be the time before they under go project XM. Boeing was talking about starting a second 787 production line, no?

KrisYYZ


User currently offline9252fly From Canada, joined Sep 2005, 1390 posts, RR: 0
Reply 19, posted (7 years 11 months 1 week 6 days 10 hours ago) and read 10121 times:

Quoting Sebring (Reply 16):
It could be that ACE believes it ordered too many 190s, or is taking delivery of the right amount in too short a timeframe.

That makes a lot of sense to me. As much as I like the E190,it would seem an astute idea to transfer a number of these aircraft to RG as they would fit very nicely into the new restructed airline. The question is how many? Typically a mininum of about twenty aircraft of a type becomes efficient for a carrier to operate. Politically,for the Brazilians,it makes an investment by AC more appealing,as it becomes a win,win situation.


User currently offlineBrasuca From Brazil, joined Mar 2004, 717 posts, RR: 11
Reply 20, posted (7 years 11 months 1 week 6 days 8 hours ago) and read 9918 times:

VARIG is now at strife with Boeing concerning past debts: if New Varig wants Boeing aircraft, (new) RG must settle (old) RG debts. But (new) RG refuses decisively to pay other's bill. That's why they are switching over Airbus / Embraer.

Varig seems to have no credit for the time being. It is then implied AC will stand VARIG's surety if these aircraft are Boeing's.

The question I have is: are AC aircraft owned? Are they stored? What are their condition?



Varig, Varig, Varig
User currently offlineFLYACYYZ From Canada, joined Jan 2004, 1914 posts, RR: 12
Reply 21, posted (7 years 11 months 1 week 6 days 8 hours ago) and read 9882 times:

Quoting Brasuca (Reply 20):
The question I have is: are AC aircraft owned?

AFAIK, AC only owns its A340-500's. Perhaps 1 or 2 others. So in fact, AC is not just handing over its 767's (which I am certain are ALL leased), to resurrect the fledgling company. A deal would be worked out whereby AC would return 'X' number of airframes to the lessor, who in turn would lease them to RG.

AC's desert parked 762's are early 80's production, very high in cycles, and would be very costly from a maintenance point of view to return to active service.



Above and Beyond
User currently offlineHanginOut From Austria, joined May 2005, 550 posts, RR: 0
Reply 22, posted (7 years 11 months 1 week 6 days 8 hours ago) and read 9804 times:

Great news.

I wonder how involved AC will be with the new RG, e.g. whether they'll let TAP look after the management stuff or if they'll split the responsibilities of resurrecting RG.



Dreaming of the day I can work for an airline
User currently offlineFLYACYYZ From Canada, joined Jan 2004, 1914 posts, RR: 12
Reply 23, posted (7 years 11 months 1 week 6 days 8 hours ago) and read 9785 times:

Quoting HanginOut (Reply 22):
I wonder how involved AC will be with the new RG, e.g. whether they'll let TAP look after the management stuff or if they'll split the responsibilities of resurrecting RG.

I think given obvious cultural and language similarities, TAP would probably be a better choice. Think AC is looking for an in and out quick return on its investment. Of course, I could be wrong.



Above and Beyond
User currently offlineBman351 From Canada, joined Nov 2004, 33 posts, RR: 0
Reply 24, posted (7 years 11 months 1 week 6 days 7 hours ago) and read 9676 times:

I think AC is dumping some orders for Embraers because they're unhappy with the results of them. I have heard numerous pilots complaining about them, performance wise and I guess they don't fly very well. I was talking to a crew up in Fort McMurray the other day and they were complaing about them... but who knows what's going on...

25 9252fly : I don't think AC is unhappy with them,more a case of working the bugs out of this new aircraft. Depending on the pilot you ask,you'll likely get vary
26 FLYACYYZ : Think that may be a bit of an exaggeration. Comparitively speaking, there were far more growing pains with the A320's and the A340-500's. Any of the
27 Pdpsol : I would tend to agree with this. AC and B6 [as well as CM] are first-time E190 operators and it is entirely normal for newly-certified aircraft to ha
28 FLYACYYZ : That's it in a nutshell. If AC has any say in the day to day operations of the company, aircraft utilization will be improved, crew complements will
29 AirCanada014 : Thats great news for AC to help out the new Varig but the Forbes news was old news in June 13,2006. I don't know if TAP is still want to invest in Var
30 FLYACYYZ : Definitely promising for the New Varig, but not exactly a benevolent act. It's all about $$$$$$$, and a return on an investment.
31 Connies4ever : Have to agree, Jetlanta, I don't see this as being really a no-brainer. TAM and Gol have been very aggressive, from what I can make out, at taking Va
32 RicardoFG : good for TP and AC...now when the hell are they gonna hook up on a codeshare agreement with flights between canada and portugal?? like hurry up alread
33 9252fly : Could RG be a possible new user for the two A345 aircraft AC has on the market. Rumours abound about potential carriers for some of the other A343 air
34 MCOflyer : I think its good. Maybe Boeing will give RG a break. They could lease 787's through lessors. I think the 767's going will be the ex Canadian. MCOflyer
35 FMAL : I disagree that TAM and Gol enjoy more favorable customer preference than RG. I would say is quite the contrary. To the normal passenger, the non-enth
36 AC320tech : We need 767-300's big time, like maybe an extra 7 to 10, but dont forget, this RG thing will happen around the time of the delivery of the 777's. Pro
37 Virgin747 : How do the Air Canada employees feel? Were talking about an Airline that asked its employees to make every consession possible, and to top it off crea
38 Post contains images Hardiwv : I totally subscribe to the above position. That's why Varig needs AC management... Rgs,
39 VonRichtofen : I haven't really heard any opinions of this deal at work. But the employees are not getting back what they conceded and the little they are getting b
40 MCOflyer : Would ILFC or GECAS give RG a lease on 787's. I have a feeling thats what will replace the MD-11's down the road. MCOflyer
41 Sebring : AC's restructuring into ACE was made possible not only by employee concessions, but by concessions from lessors and other creditors, and by the infus
42 JAL : A big waste of money! Why bother invest in a seriously money losing airline!
43 Swissy : To make money.................. RG will fit nicely within, the south American market is big.................. Cheers,
44 Post contains images Brasuca : You suggest AC management team is incompetent? Maybe they have a lot to learn with you. Send them your CV.
45 Pdpsol : Well, you should be aware of the fact ACE Holdings is not in the business of "wasting" its shareholders' resources! AC has most likely analysed a pot
46 Post contains links SFORunner : http://www.aircanada.com/acts/en/media051905.html May 19, 2005 ACE Aviation Holdings today announced its intention to invest USD$75 million (approxim
47 Post contains links Brasuca : Latest info: - Thirteen 767s (presumably -200) are going to VARIG from Air Canada. - AC is expected to take part by investing in RG's FFP, Smiles. htt
48 FLYACYYZ : The dreaded paper wine boxes consisted of a one-week type trail months ago, and never came to fruition (thank goodness). Maintenance stairs on the 32
49 FMAL : Sounds like a very win-win deal for AC. They would not invest any money, but rather send to Varig its desert-parked, out of plans 762s and consulting
50 HanginOut : Where are these planes supposed to be coming from? All I've been hearing lately is how AC doesn't have enough planes. I would have thought that A340s
51 Multimark : If the employees "got back" what was given during bankruptcy, the restructuring process will have been useless. AC was paying more than could be affo
52 Planemaker : From ATI: Local press reports also suggest that Air Canada could transfer some of the early Embraer 190 delivery slots to Varig, should Varig receive
53 Hardiwv : Nadson: tks again for keeping us posted with the breaking news. Very interesting what Folha writes about AC's interest in RG's mileage programe (Smil
54 Pdpsol : A fleet of 56 E190's would truly place RG in a leading regional role, not just in Brasil, but in local markets such as EZE, SCL and MVD. I suspect th
55 Planemaker : No, not in addition to AC's 6 x E190's acording to ATI. AC would only transfer the early delivery slots to RG for their proposed E195 order. AC would
56 Post contains images AirCanada014 : I think most of AC B767-200s are parked in the desert. They would bring them back fix them up and transfer them to the new Varig?. AC has done so well
57 Tiago701 : This link is not referring to this deal but to the previous attempt made by TP and AC back in June. It would be great news if TP was involved in this
58 FMAL : Too bad Brazilian legislation limits international investment in a national airline to 20%. To me, an outdated legislation. I believe that control of
59 Jrosa : I thoroughly agree with you!
60 Brasuca : I could find no news today in the media, past the day set for the press release. Any info about it? In the US, foreign partnership in airlines can be
61 AirCanada014 : I was surprise to hear Varig has 9 million FF members while Air Canada has 6 million FF members. Way back in the late 90's did UA and LH made a profit
62 Jamincan : I checked the news releases on aircanada.com, and the only news from Friday is the executive appointments. How long do we wait before deciding this is
63 Post contains links PPVRA : Here is a good article from yesterday (25AUG) on FI: http://www.flightglobal.com/Articles...+talks+with+Air+Canada+parent.html Cheers
64 AirCanada014 : That article is good enough for not to be a rumour. I think sometime next early week we'll hear from AC's news.
65 Hardiwv : I also think we will see an outcome of the deal during next week. RG needs to restrablish part of its network quickly to avoid losing route authoriti
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