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Posts: 639
Joined: Mon Aug 16, 1999 5:00 pm

Brzl Airlines' Predictions

Thu Oct 21, 1999 7:10 pm

Transbrasil will merge with Varig, TAM will remain on its own and Vasp will go broken.

I think this is the most realistic scenario to be expected in the Brazilian airline market soon. Varig and Transbrasil have a long-standing relationship in both marketing and supporting services. TAM, despite the most recent losses, has a better financial position as well as a better-structured enterprise, meaning that a merger (sharing decisions partially or equally with Vasp) could destabilize its management culture, resulting in potential future losses.

It would be quite feasible, in my opinion, for TAM to make a bid for Vasp and thus acquiring total management control. TAM has a successful history of buying other (but smaller) airlines throughout the country. However, the CEOs of Vasp and TAM are mortal enemies meaning that Vasp is highly unlikely to give up and sell its business to TAM. CEO Canhedo's pride is an expensive one.

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

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