glennpower
Posts: 92
Joined: Wed Jul 14, 2004 2:41 am

Varig Debt, Now US$3.4 Billion

Tue Apr 19, 2005 4:37 am

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.

Regards to all.
 
StevenUhl777
Posts: 3281
Joined: Sun Jul 08, 2001 11:02 am

Varig Debt, Now US$3.4 Billion

Tue Apr 19, 2005 4:40 am

We wish we only had US $3.4B in debt.... Yeah sure

Signed,
Delta, American, Continental, Northwest, and United Airlines.
And the winner for best actress is....REESE WITHERSPOON for 'Walk the Line'!!!!!!!!
 
glennpower
Posts: 92
Joined: Wed Jul 14, 2004 2:41 am

Varig Debt, Now US$3.4 Billion

Tue Apr 19, 2005 5:20 am

Ah but all those carriers you named are way bigger,so all in proportion really.
 
GaleaoCumbica
Posts: 92
Joined: Thu Mar 11, 2004 6:11 am

Varig Debt, Now US$3.4 Billion

Tue Apr 19, 2005 5:42 am

Hi,

I agree with you StevenUhl777.
VARIG is not alone!!
Just look around!

Cheers

GaleaoCumbica
 
senorcarnival
Posts: 1732
Joined: Tue Mar 08, 2005 4:05 am

RE: Varig Debt,now US$3.4 Billion

Tue Apr 19, 2005 5:48 am

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?
Oh no, she's getting impatient! Take a stab at it!
 
Avianca
Posts: 5273
Joined: Tue Jan 25, 2005 5:33 am

RE: Varig Debt, Now US$3.4 Billion

Tue Apr 19, 2005 5:53 am

the situation for Varig seems not to be the best for them.

I hope not but all indications looks for the end of this company in near future.

regards
Colombia es el Mundo Y el Mundo es Colombia
 
PPVRA
Posts: 7878
Joined: Fri Nov 12, 2004 7:48 am

RE: Varig Debt, Now US$3.4 Billion

Tue Apr 19, 2005 6:00 am

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
Posts: 469
Joined: Tue Jan 13, 2004 9:16 am

RE: Varig Debt, Now US$3.4 Billion

Tue Apr 19, 2005 6:05 am

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
Posts: 2688
Joined: Tue Nov 14, 2000 11:51 am

RE: Varig Debt, Now US$3.4 Billion

Tue Apr 19, 2005 6:32 am

$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.
Tired of airline bankruptcies....EA/PA/TW and finally DL.
 
senorcarnival
Posts: 1732
Joined: Tue Mar 08, 2005 4:05 am

RE: Varig Debt, Now US$3.4 Billion

Tue Apr 19, 2005 6:35 am

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?
Oh no, she's getting impatient! Take a stab at it!
 
PPVRA
Posts: 7878
Joined: Fri Nov 12, 2004 7:48 am

RE: Varig Debt, Now US$3.4 Billion

Tue Apr 19, 2005 6:53 am

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
Posts: 1732
Joined: Tue Mar 08, 2005 4:05 am

RE: Varig Debt, Now US$3.4 Billion

Tue Apr 19, 2005 7:20 am

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.
Oh no, she's getting impatient! Take a stab at it!
 
yul332LX
Posts: 798
Joined: Sat Feb 07, 2004 5:15 am

RE: Varig Debt, Now US$3.4 Billion

Tue Apr 19, 2005 7:54 am

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 ...
 
piedmontnut
Posts: 76
Joined: Sun Apr 17, 2005 6:56 am

RE: Varig Debt, Now US$3.4 Billion

Tue Apr 19, 2005 8:45 am

Welcome to the world of operating in the RED.  crowded  Sad indeed for the employees and the airlines.
May the A380 arrive @ MCO in the near future.
 
erikwilliam
Posts: 2122
Joined: Fri Mar 12, 2004 12:30 am

RE: Varig Debt, Now US$3.4 Billion

Wed Apr 20, 2005 2:20 am

Quoting YUL332LX (Reply 12):
Are RG's debts denominated mostly in Reais or US$?

with the government, excepet Petrobras, in Reais, the lessors and the rest : USD
Dida, Cafu, Lucio, Roque Junior, Roberto Carlo, Emerson, Ze Roberto, Ronaldinho, Kaka, Adriano, Robinho, Ronaldo

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