TP727
Topic Author
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Joined: Sun May 22, 2005 12:21 am

RG With 31 Acft Grounded

Fri Oct 07, 2005 8:34 am

I was navigating on www.terra.com.br and saw that RG is in a even deeper trouble now.
The article said that their maintence director was complaining about the money that the airline new management team was putting on the planes maintence was not even close to the necessary amount. He said that if things don´t go on a different way, by year end there will be 31 acft with no conditions to fly.
That is very sad to read! RG has been known for it´s excellently and high standards, and in the past few years those levels have came down big time. I would have a few personal reasons to wish a very short future for RG, but that is not the case. I do hope they get out of this awful situation, get back on their feet, and go up again.
One thing is for sure, plane and poor maintence do not belong together. There are some examples showing that saving costs on maintence can work for the best, but there also are many others showing that it can really hurt an airline.
I do not question RG´s crew abilities, never did except for once a few years ago (very specific case, can´t remember the captain´s name now, but he just did everything wrong). They have proved to be good in many situations, and RG is known as an excellent trainer airline, but the best of all pilots cannot work with poor maintence.
Hope to hear any official statement from RG´s management soon, this is a very sad issue and has to be faced properly.
If any of you guys can clear my informations, and ad a few others i will be more than thankful.
TP727
 
TP727
Topic Author
Posts: 95
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RE: RG With 31 Acft Grounded

Fri Oct 07, 2005 8:45 am

There goes the link to the article i read. I am sorry but it´s for portuguese readers only. I know i should have put the link on the initial post, but please forgive an old man´s mind and lack of computer ability. Hope it works!

http://br.invertia.com/noticias/noti...dNoticia=200510061251_GZM_28787610

TP727
 
PPVRA
Posts: 7878
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RE: RG With 31 Acft Grounded

Fri Oct 07, 2005 8:56 am

Whoa! COULD, not IS. Title is a bit misleading.

I did read something about RG management response, I'll try to find, but it went on saying that that was the reason they want to sell VarigLog.

Varig could be in much worse situation if absolutly nothing happens by then. They need to act quicker on those proposals that have been offered.

Cheers

[Edited 2005-10-07 02:01:55]
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
LipeGIG
Posts: 5050
Joined: Tue May 03, 2005 7:33 am

RE: RG With 31 Acft Grounded

Fri Oct 07, 2005 9:30 am

Very bad.
I read the article on all business newspapers today but as PPVRA said, they keep 15 aircraft grounded, not 31.

Aircrafts on Ground:
10 Boeing 737-300 or 500
02 MD-11
01 Boeing 767-300ER
01 Boeing 777-200
01 Boeing 777-200ER

Two of them, 01 MD11 and 01 Boeing 777-200 will be back to service soon.

The problem in the article is that RG is using only 10% of the money they need to use to keep all aircrafts ready to fly, and due to this, RG could face a major shutdown on their fleet.

The second GRU-MIA as well as the 3 additional GRU-JFK is in danger as up to this moment RG keep MAD and MIA runing with a single widebody. Several routes, like MEX, LIS, MAD and BOG are using 767's (inclusive from EuroAtlantic/Varig Charter).

Some facts like a GRU-MAO-BOG with a 737-300, a non-ER 777 runing FRA-GRU with technical stop at REC, downgrading again GRU-EZE (to use the 752 on GIG-GRU-CCS), the drop of NRT....

Wish to see the entire fleet flying, but RG need funds to do this. (At least US$ 70 million).

Felipe
New York + Rio de Janeiro = One of the best combinations !
 
vincewy
Posts: 533
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RE: RG With 31 Acft Grounded

Fri Oct 07, 2005 2:30 pm

Even 15 grounded is bad news for the carrier, how can a carrier, representing a nation that has so much potential, getting to this point? In the 80s RG is THE ONLY RESPECTABLE AIRLINE in Latin America that can compare with major Asian and European airlines, it was also THE FIRST AIRLINES in Latin America that brought in 744.
 
hardiwv
Posts: 4341
Joined: Sat Oct 09, 2004 11:30 pm

RE: RG With 31 Acft Grounded

Fri Oct 07, 2005 4:26 pm

Quoting Vincewy (Reply 4):
how can a carrier, representing a nation that has so much potential, getting to this point?

Ask the same question for US carriers, and the list is huge..

TAM is the biggest airline in Brazil nowadays.

Rgs,
 
juventus
Posts: 2017
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RE: RG With 31 Acft Grounded

Fri Oct 07, 2005 9:28 pm

WOW. I knew it was bad, but not that bad. I came accross this article 3 days ago.

http://www.bloomberg.com/apps/news?p...fer=latin_america&sid=aYJh5MNnzieM

I hope things workout for Varig. A lot of tradition there.

saludos desde cancun....
 
CB777
Posts: 1135
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RE: RG With 31 Acft Grounded

Fri Oct 07, 2005 10:10 pm

Maybe Continental will the get the 777-200ERS if matters get a lot worse
 
komododx
Posts: 1734
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RE: RG With 31 Acft Grounded

Fri Oct 07, 2005 10:33 pm

Quoting Vincewy (Reply 4):
Even 15 grounded is bad news for the carrier, how can a carrier, representing a nation that has so much potential, getting to this point? In the 80s RG is THE ONLY RESPECTABLE AIRLINE in Latin America that can compare with major Asian and European airlines, it was also THE FIRST AIRLINES in Latin America that brought in 744.

Avianca in the 1980s had a very strong European network. They were also the first airline to introduce 747 Jumbo Jets in South America.

Stefano  wave 
I'm homeless and unemployed
 
PPVRA
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RE: RG With 31 Acft Grounded

Fri Oct 07, 2005 10:53 pm

Quoting Vincewy (Reply 4):
Even 15 grounded is bad news for the carrier, how can a carrier, representing a nation that has so much potential, getting to this point?

I think that number includes a/c that are on normal maintenance schedule, albeit most likely a bit delayed also...

Blame it on an over-regulated market pre-1990's, horrible management, and a devaluation of the local currency by over 50% (doubled RGs debt in no time).

It is especially alarming to me that RG never owned any of their aircraft, making them extremely susceptible to monetary fluctuations...

Good luck RG!

Cheers
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
TP727
Topic Author
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RE: RG With 31 Acft Grounded

Fri Oct 07, 2005 11:36 pm

About the 31 acft grounded, the article clearly says that by year end that will be the number of planes not flying, if money keeps going as it it today.
I guess the title i choose did cause a worse impression, but RG´s situation is very very bad.
If money doesn´t start to show up on the maintence department - or VEM - i do not think RG will be around by mid next year. They will have to drop other routes, and big airlines in good financial situation, such as AF, JJ, LH, or even the broken american airlines, UA and AA will take a big portion of the international market.
In other hand, 10% of the money needed can not make a good work. If any RG acft goes down for tech reasons, and that causes deaths, i really doubt they would be able to stand up again.
TP727
 
hardiwv
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RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 12:36 am

Quoting TP727 (Reply 10):
RG´s situation is very very bad.

Correct. I dont think we will see RG flying in 2006...

TAM already stated it can take over all international routes.

Rgs,
 
NetworkDoc
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RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 12:52 am

How much longer will Star tolerate RG in the alliance? Mexicana had to leave, but will Star give up RG in the same way (providing RG stays in business)? Would Star try to lure TAM instead given the circumstances?
Flown: AB/BA/BD/BI/CX/DI/DL/KE/KL/LH/LT/LX/MH/NW/OZ/PR/QF/SN/SQ/TW/UA/VS/5J.
 
hardiwv
Posts: 4341
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RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 1:08 am

Quoting NetworkDoc (Reply 12):
How much longer will Star tolerate RG in the alliance? Mexicana had to leave, but will Star give up RG in the same way (providing RG stays in business)? Would Star try to lure TAM instead given the circumstances?

Star needs RG - RG still is the biggest airline in Latin America and has a huge hub in GRU, where Star airlines operate their service in Brazil.

TAM will never join Star...even Sky and OW can manage to attract TAM.

Rgs,
 
LipeGIG
Posts: 5050
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RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 1:27 am

Quoting Hardiwv (Reply 13):
Star needs RG - RG still is the biggest airline in Latin America and has a huge hub in GRU, where Star airlines operate their service in Brazil.

TAM will never join Star...even Sky and OW can manage to attract TAM.

100% True. Also RG is using some UA planes and receiving some LH support as a consulting but RG situation is really bad. Without the deal concerning to VELOG (Varig Cargo), they have no money for example to fix one PP-VRA engine (one of the two 777ER's received directly from Boeing in 2001). This plane could generates US$ 15 million in revenue (at FRA routes) per month, but RG could not afford the new engine costs. Some weeks ago, a Varig director said that the option to come into Court Protection (chapter 11) was higher than return the 11 planes (including 2 772) to ILFC as several credit lines has been frozen by banks and suppliers.

I can't see TAM joining Star due to its partnership with AA.

Regards,
Felipe
New York + Rio de Janeiro = One of the best combinations !
 
A342
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RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 3:55 am

And once again GRU-MUC could go down the road...  Confused
Exceptions confirm the rule.
 
Neo
Posts: 730
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RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 4:19 am

Quoting Hardiwv (Reply 11):
TAM already stated it can take over all international routes.

Hum, I think I'll believe that when I see it from my own eyes. JJ has always been very too cautious and perhaps slow when it comes to expanding internationally.

If RG does cease its operations (let's hope not), I doubt JJ would take over their intl. routes in the short-medium term. In order to do that JJ would need to quickly buy/lease lots of aircrats to be able to flight all current RG intl. routes.

Rgs,

Neo
 
PanAm747
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RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 6:07 am

http://aviation-safety.net/database/record.php?id=19890903-0

I believe this is the accident that TP727 is referring to.

I hope for the best for VARIG - it would be such a shame to see such a great airline with a rich history go the way of Pan Am...
Pan Am:The World's Most Experienced Airline - P(oor) S(ailor's) A(irline): San Diego's Hometown Airline-Catch Our Smile!
 
ThaiboynMexico
Posts: 56
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RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 6:16 am

Could anyone tell me how much of RG is owned by the Brazilian government? Is it completely private? I'm sure the government still holds at least a golden share, which would allow intervention if the worst occurs...but let's hope not.

Thanks
 
ThaiboynMexico
Posts: 56
Joined: Mon Jul 18, 2005 4:36 am

RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 6:18 am

And even now, is the government doing something about it at all? Or are they just letting free market determine the fate of Varig?

[Edited 2005-10-07 23:20:40]
 
XA744
Posts: 630
Joined: Sat Mar 13, 2004 11:40 am

RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 6:30 am

Quoting PanAm747 (Reply 17):
hope for the best for VARIG - it would be such a shame to see such a great airline with a rich history go the way of Pan Am...

Can some of our Brazilian friends explain in just very few words, the basic points of mismanagement at Varig that have taken the carrier to its current critical situation ?

I still remember those proud Convair 990A´s that VARIG began flying to MEX, when the two countries established an air bilateral back in 1963.

Thank you Varig !
No matter how you fly...just never get your wings clipped !
 
LipeGIG
Posts: 5050
Joined: Tue May 03, 2005 7:33 am

RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 6:33 am

Quoting Neo (Reply 16):
Quoting Hardiwv (Reply 11):
TAM already stated it can take over all international routes.

Just a new inside... TAM has just begin it's brand marketing at London. Some cabs are showing their First Class seats. We could see a London JJ flight to Gatwick next year with the A332 TAM will receive back from Etihad.

LHR is probably one of the best RG routes nowadays (after FRA and JFK).

Felipe
New York + Rio de Janeiro = One of the best combinations !
 
antiuser
Posts: 646
Joined: Thu May 27, 2004 9:43 am

RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 6:45 am

Quoting ThaiboynMexico (Reply 18):
Could anyone tell me how much of RG is owned by the Brazilian government?

I think RG has been a private airline since they started in the late 1920s. Now it's owned mostly by the Ruben Berta Foundation.
Azzurri Campioni del Mondo!
 
TP727
Topic Author
Posts: 95
Joined: Sun May 22, 2005 12:21 am

RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 7:05 am

Quoting PanAm747 (Reply 17):
I believe this is the accident that TP727 is referring to.

You got me. That is the only occasion i can remember that a RG crew screwed up. There are a few other accidents on the referred airline´s record, but on every one that comes to my mind their crew did a get job.
RG´s crew are known world wide as well trained. I wouldn´t say the same about JJ a few years back. Don´t know how they are doing now, it´s probably better, since i haven´t heard any relevant thing about the subject lately. Many people may not remember, but some 10 years ago a JJ captain was able to land on an airport thinking he was landing on another. The F100 was to land at VIX, but land in Guarapari (a small town some 25nm far from the right destination).
Anyways, i do hope the best for RG (besides i think they are only having a small taste of their own medicine - poison may be better) and JJ. The latest only needs to keep the good work and be a little more aggressive. The other needs to put their act together, stop wasting money on nonprofitable routes and keep their acft flying.
If people are to loose their jobs in order for the airline keep flying, so be it. It´s better than everyone to loose. If the route does not make money, drop it and cut the patriotism crap. Flying a route on patriotism will let any airline on empty pockets.
TP727
 
hardiwv
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RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 7:26 am

Quoting LipeGIG (Reply 21):
TAM has just begin it's brand marketing at London. Some cabs are showing their First Class seats. We could see a London JJ flight to Gatwick next year with the A332 TAM will receive back from Etihad.

Correct. I confirm many cabs in LON are showing TAM lie-flat seats on First and Business. TAM always had a good marketing campaign in LON offering excellent prices for tickets from LON to Brazil via CDG.

I can see TAM will start flights to LON (i.e. LGW) in 2006. I think the flight will be codeshare with VS. Recently TAM has developed very close ties with VS and TAM shares VS'ss MARVELOUS business lounge in JFK. [VS and JJ even have somehow a similar corporate identity with the red/white combination].

VS was also looking into operating in the Brazilian market and GIG was mentioned as a potential destination. However, if VS and JJ codeshare with flight would operate in GRU and maybe, with this VS arrangement, JJ could even land in LHR.

Rgs,
 
LipeGIG
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RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 7:50 am

Quoting A342 (Reply 15):
And once again GRU-MUC could go down the road...

If they keep loosing aircrafts, very true.

Quoting ThaiboynMexico (Reply 18):
Could anyone tell me how much of RG is owned by the Brazilian government? Is it completely private?

In fact zero ! Completely private. But it debts with public sector are over US$ 2 billion.

Quoting ThaiboynMexico (Reply 19):
And even now, is the government doing something about it at all? Or are they just letting free market determine the fate of Varig?

Due to historical problems, the government is trying to do NOTHING. RG has a winner lawsuit against the government but the government tried to recourse and postpone the settlement (the amount is about US$ 2 billion). All the times the government says that RG solution must be a market solution.


Quoting XA744 (Reply 20):
Can some of our Brazilian friends explain in just very few words, the basic points of mismanagement at Varig that have taken the carrier to its current critical situation ?

Let's see:

1) Bad use of its reserves. RG in 70's keep a lot of owned planes, good and strong cash flow, but use the money to build hotels, services for employees, reservation systems, the MHRO operation. When RG need to change for new and more expensive planes, it need to change for leasing. For the first moment (80's and first half of 90's) it's not a problem, but it begin to turn RG not a so profitable airline.
2) Heavy and slow: RG keep the same type of administrations as in 80's during 90's: Owned by a Foundation (FRB - Rubem Berta Foundation), with a very heavy structure, slow in decisions.
3) Market Change: In 90's when President Collor open international routes for new playes (Transbrasil and Vasp), Varig imagine to improve their operations at the same time the others do the same, as well as US Airlines grant approval to fly US-Brazil (during many years Varig and PanAm keeps a virtual monopoly on US-Brazil with little flights, very high loads and high ticket prices). RG experienced an expansion to Hong Kong, take some 744 planes, more M11's (paying high prices for the long term finance agreements due to the fact that Brazil has just declare an international debt default). Also on domestic flights, Varig 732 fleet face strong competition from the fleets of Transbrasil (more 733) and even Vasp. Varig tried to obtain new planes (the RG 732 was all owned, the 733 fleet leased). With this, Varig expect to fight the others, and win the combat after some months, without expending so much money. But this fight takes some years and destroy international networks of both Vasp and Transbrasil, and puts Varig for the first time in a very hard position.
4) While with the possibility of reducing its size, Varig keep with excessive fleet, delay to stop bad routes, and keep loosing money in domestic routes.
5) Varig has renegotiated its debt on 1994, but again face problems while the domestic expansion of Vasp and Transbrasil in 1996, and a direct hit in 1999 when the currency has devaluated (from US$ 1 = R$ 1,20 to US$ 1 = R$ 2,40). Varig holds a lot of US$ debt nominated, high M11 installtments, bad leasing agreements (with high rates), and problems with past investments (hotels, reservation systems, bad investments in other assets).
6) When Varig start to sell assets to cover its main problem, market face a global crash, assets are not so valuable and they need to do large write-offs as well as when renegotiating with Boeing to do a lease-back on M11's, RG face some losts.
7) TAM become a strong player in 90's and obligate Varig to launch a Frequent Flyer program which helps to reduce its profitability.
8) Varig keeps it main hub at GIG during decades, very profitable and runing strong international and domestic service. In 90's RG change the international hub to GRU and create a domestic network GRU-xxx in order to feed the hub, it creates a duplicity of offer and during several years many feeder flights from/to GRU keep unprofitable, reducing more its profitability.
9) Varig delayed to see that CGH become the best biz market and up to 2003 keep a very weak presence there because RG need a lot of planes at both GIG and GRU hubs.
10) Old and several types of planes at Fleet: Due to the problems above, RG postpone fleet renovation and nowadays face strong competition from JJ (on MIA and CDG), BA (on LHR), IB (on MAD), CO and many others with lie seats, IFE's on all or main routes, while RG keep using M11's and 767's without lie seats or IFEs (even on Biz and First).
11) Gol: Competition has become even more strong with Gol on domestic routes. Varig lost the oportunity to launch its low cost on 2000 (using the 732 fleet and some leased planes) and take more than 2 years to see Gol as a strong competitor. When RG realize Gol's size, they get bigger enough to face RG and even JJ.
12) Large Debt: With annual deficits, Varig start to postpone public debt and banking credit lines at Brazilian High Interest Rates (nowadays 19,5% p.a.) which produces a major debt of up to R$ 7 billion nowadays. Just to understand, RG debt per day in interest only is R$ 3,8 million or US$ 1,68 million. It means that RG need to produce an annual cash flow of US$ 615 million just to pay out the interest and keep the principal flat.
13) Default Historic: With VASP and Brazil attitude of default, Brazil is hitten and also RG, need to pay higher leasing fares and with cash collaterals, need to obtain strong guarantees to operate on most international airports, cash deposits to use international reservation services, and nowadays, with difficult to just discount credit card receivables. All of that together improve financial costs.

There's more... but thats what i remember just for this moment

Regards
Felipe
New York + Rio de Janeiro = One of the best combinations !
 
PPVRA
Posts: 7878
Joined: Fri Nov 12, 2004 7:48 am

RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 9:08 am

Quoting LipeGIG (Reply 14):
Without the deal concerning to VELOG (Varig Cargo), they have no money for example to fix one PP-VRA engine (one of the two 777ER's received directly from Boeing in 2001).

Or if they can get a deal settled with an investor.

Quoting Neo (Reply 16):
Quoting Hardiwv (Reply 11):
TAM already stated it can take over all international routes.

Hum, I think I'll believe that when I see it from my own eyes. JJ has always been very too cautious and perhaps slow when it comes to expanding internationally.

If RG does cease its operations (let's hope not), I doubt JJ would take over their intl. routes in the short-medium term. In order to do that JJ would need to quickly buy/lease lots of aircrats to be able to flight all current RG intl. routes.

 checkmark 

The only way would be if they took some of RG's longhaul fleet and crew.

Quoting TP727 (Reply 10):
If any RG acft goes down for tech reasons, and that causes deaths, i really doubt they would be able to stand up again.

You read the article, RG's operational Vice President said that under no circumstances any aircraft will take-off if it is not properly maintained.

Quoting ThaiboynMexico (Reply 18):
Could anyone tell me how much of RG is owned by the Brazilian government? Is it completely private? I'm sure the government still holds at least a golden share, which would allow intervention if the worst occurs...but let's hope not.



Quoting Antiuser (Reply 22):
I think RG has been a private airline since they started in the late 1920s. Now it's owned mostly by the Ruben Berta Foundation.

87% on the hands of FRB.

As LipeGIG & Antiuser stated, always private  checkmark .

But as bad as the situation is, RG's September pax count is up more than 6%, all due to a rapidly expanding market.

Cheers,
PPVRA
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
JJMNGR
Posts: 924
Joined: Wed May 26, 2004 9:06 pm

RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 10:54 am

Neo,

You are right when say JJ is slow in expanding international routes...but to expand in some markets entering as a second flag carrier would only bring the lost of money for everybody. JJ will expand at any destination and at any time possible with the condition to make money! JJ won´t expand to become another VARIG.
Also JJ has plenty capacity to take all intl. VARIG routes (PROFITABLE) and if more aircrafts will be need for this it won´t be a problem also. JJ has credit in the market, a close relationship with Airbus and in a click of the fingers JJ can have the aircrafts. Airbus will be glad!

TP727 - What most people don´t know and I can see neither you, is that the episode of Guarapari, the PF the aircraft was a DAC inspector checking the route.....but of course they won´t assume that. I also agree with you that a little bit more aggressive presence in the market would help a lot. I have the feeling that extending TAM´s presence in JFK next month more doors would be opened, specially to FarEast.

Must confess to you all I wouldn´t enter in this forum because I am fed-up about this RG problem. I discussed it a lot since last 1 year, many did not believe they would get like they are and here is the result. ...
 
ghost77
Posts: 4461
Joined: Wed Mar 01, 2000 2:07 pm

RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 11:24 am

Quoting JJMNGR (Reply 27):
Must confess to you all I wouldn´t enter in this forum because I am fed-up about this RG problem. I discussed it a lot since last 1 year, many did not believe they would get like they are and here is the result. ...

Truth! JJ always said it and everybody yield at him! So sad to see RG in this situation... nothing against RG but quite frankly I don't see them ending 06.


ghost77 APM
Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
 
XA744
Posts: 630
Joined: Sat Mar 13, 2004 11:40 am

RE: RG With 31 Acft Grounded

Sat Oct 08, 2005 1:37 pm

Quoting LipeGIG (Reply 25):
Let's see:

Thank you Felipe, very comprehensive and authoritative info you are throwing in here.

Regards
No matter how you fly...just never get your wings clipped !
 
GaleaoCumbica
Posts: 92
Joined: Thu Mar 11, 2004 6:11 am

RE: RG With 31 Acft Grounded

Sun Oct 09, 2005 2:40 am

Hi all,

I don't think we will see RG out of the sky, at least, not now or next year.
Brazilian Govern won't allowed it.
All these problems are not new and everybody knows it.
RG is still flying, don't know how, but they are there, doing their job.
A/Cs in bad conditions?
There are plenty of other airlines in the same situation and also planes in bad conditions. RG is not alone.
Regarding black cabs in London,showing TAM's adverts, they are around for more than a year.
The advert shows that TAM flies from Paris to Brazil and not from London.
Of course, if JJ starts flying LON-GRU everybody here will be happy but I personally won't fly with them as I only fly Star or OW. Airmiles and company requests.
Have in mind that LGW is far from Central London (also LHR) and train tickets are a lot more expensive comparing to the Underground prices.
Now I have a question out of the above issue.
Is that true that RG will stop flying to LIS?
I have a ticket in December from LHR to GRU, with TP/RG, via LIS.
If they drop the service, what TP will do, as my ticket has been issued by them?

Cheers

GaleaoCumbica
 
LipeGIG
Posts: 5050
Joined: Tue May 03, 2005 7:33 am

RE: RG With 31 Acft Grounded

Sun Oct 09, 2005 4:42 am

Quoting Galeaocumbica (Reply 30):
Is that true that RG will stop flying to LIS?
I have a ticket in December from LHR to GRU, with TP/RG, via LIS.
If they drop the service, what TP will do, as my ticket has been issued by them?

GaleaoCumbica, there are several rumors that RG will drop LIS as soon as TP get additional aircraft and grant an additional GRU-LIS and GIG-LIS flights (don't know how many frequencies for each market, but TP several times said their intention to improve GIG service, and they may replace RG on GRU-LIS 6 times per week).
If RG really drop LIS they will keep code-share with TP, so tickets will be valid (the same for NRT route which has been confirmed that RG will drop, using code-share with ANA flight LAX-NRT with 773 planes)

RG informed that they keep 3 international routes with deficits that could be droped up to feb/06. One was NRT, market imagine that LIS is one of the other two. No info on the other, but i imagine could be BOG or the extensions AMS/CPH.

Regards,
Felipe
New York + Rio de Janeiro = One of the best combinations !
 
hardiwv
Posts: 4341
Joined: Sat Oct 09, 2004 11:30 pm

RE: RG With 31 Acft Grounded

Sun Oct 09, 2005 4:17 pm

Quoting LipeGIG (Reply 31):
or the extensions AMS/CPH.

Dropping the extensions AMS or CPH wont make any difference to RG flights. If RG does not fly the extensions the a/c will lie iddle in LHR and CDG without making any impact on fleet deployment.

NRT is down, LIS could be the next one. I have no idea which is the third route to be axed. I dont think RG would drop BOG. But the situation does not look good...

Quoting Galeaocumbica (Reply 30):
Of course, if JJ starts flying LON-GRU everybody here will be happy

As I said, if JJ flies to LON it would operate in codeshare with VS. VS and JJ have somehow a similar profile: they are not members of a major alliance and offer a top quality products. Their colours also look the same. VS already mentioned they want to fly to Brazil on LHR-GIG. I assume JJ and VS could codeshare GRU-LHR and this flight would be quite successful. Maybe VC could arrange a slot for JJ in LHR.

Rgs,
 
PPVRA
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RE: RG With 31 Acft Grounded

Mon Oct 10, 2005 12:14 am

Quoting Hardiwv (Reply 32):
Quoting LipeGIG (Reply 31):
or the extensions AMS/CPH.

Dropping the extensions AMS or CPH wont make any difference to RG flights. If RG does not fly the extensions the a/c will lie iddle in LHR and CDG without making any impact on fleet deployment.

well, it can. If AMS hurts their profits, or lower the number of cycles (delays maintenance requirements).

Quoting Hardiwv (Reply 32):
As I said, if JJ flies to LON it would operate in codeshare with VS. VS and JJ have somehow a similar profile: they are not members of a major alliance and offer a top quality products. Their colours also look the same. VS already mentioned they want to fly to Brazil on LHR-GIG. I assume JJ and VS could codeshare GRU-LHR and this flight would be quite successful. Maybe VC could arrange a slot for JJ in LHR.

Very likely. JJ signed an agreement with VS that will allow their pax to use VS's lounge in NYC.

Cheers

[Edited 2005-10-09 17:14:34]
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
hardiwv
Posts: 4341
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RE: RG With 31 Acft Grounded

Mon Oct 10, 2005 1:50 am

Quoting PPVRA (Reply 33):
If AMS hurts their profits, or lower the number of cycles (delays maintenance requirements).

This is not the case. AMS actually improves RG results to CDG. AMS is responsble for 60% of the cargo on the route to CDG and 20% of the pax.

Quoting PPVRA (Reply 33):
JJ signed an agreement with VS that will allow their pax to use VS's lounge in NYC

I mentioned this above. VS and JJ have somehow a similar profile and identical quality airline image. I find a VS + JJ partnerhsip also very likely in the future. JJ could draw on VS intercontinental network to Asia from LHR and VS on JJ market presence in Brazil and deep South America. This is a partnerhsip which has a lot of synergies to develop.

Rgs,
 
LipeGIG
Posts: 5050
Joined: Tue May 03, 2005 7:33 am

RE: RG With 31 Acft Grounded

Mon Oct 10, 2005 3:34 am

Quoting Hardiwv (Reply 34):
This is not the case. AMS actually improves RG results to CDG. AMS is responsble for 60% of the cargo on the route to CDG and 20% of the pax.

Hardi and PPVRA, could be CPH as it's the base of another Star partner (SAS). It will be the same situation of NRT route, i.e. RG drop and SAS nowadays runs LHR-CPH, allowing connections. As per some trip reports, loads on RG LHR-CPH are always less than 40%. Also CPH could be connected thru FRA.

BOG shows not so good loads, operation is not daily and the competitor, AV, will run a daily flight very soon. With these conditions, probably RG will be more hurt by AV. If you verify other routes, all are daily (or at least 6 times like CCS where RG is the sole player on the route) and could be run with smaller planes (like MVD and VVI). MEX keeps strong and even more just because of CUN (yesterday Varig run a charter with PP-VRB , a 777-200ER, GIG-CUN with 260 pax).

Rgds,
Felipe
New York + Rio de Janeiro = One of the best combinations !
 
A342
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RE: RG With 31 Acft Grounded

Mon Oct 10, 2005 3:37 am

Quoting LipeGIG (Reply 35):
Also CPH could be connected thru FRA.

Or MUC  bigthumbsup , but see above.
Exceptions confirm the rule.
 
ghost77
Posts: 4461
Joined: Wed Mar 01, 2000 2:07 pm

RE: RG With 31 Acft Grounded

Mon Oct 10, 2005 3:43 am

Quoting LipeGIG (Reply 35):
MEX keeps strong and even more just because of CUN (yesterday Varig run a charter with PP-VRB , a 777-200ER, GIG-CUN with 260 pax).

And then why would RG downgrade to B767? Apart from the visa issue and aircraft mx problems, they should be sending to MEX an M11 to MEX if a 772 is down, but now that visas are requiered on both sides traffic on route has decreased...


ghost77 APM
Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
 
LipeGIG
Posts: 5050
Joined: Tue May 03, 2005 7:33 am

RE: RG With 31 Acft Grounded

Mon Oct 10, 2005 3:48 am

Quoting A342 (Reply 36):
Or MUC , but see above.

You're 100% correct.
A342, i think that LH have to decide if SCL will be kept on the network, if they will just open a new base at CNF or come back to GIG. With RG starting 3 new frequencies, we can see LH improving their service Germany-Brazil with 3 additional frequencies. We can see:
3 times GRU-MUC M11 RG
3 times GRU-MUC ??? LH
1 time GIG-MUC 763 RG
(A daily flight!)  Smile

Also, bookings for the coming year are VERY HIGH due to the world cup. About 40,000 brazilians are expected to travel to Germany next year for the world cup (which means very high loads during june and july). Improvements are highly expected.

Felipe
New York + Rio de Janeiro = One of the best combinations !
 
PPVRA
Posts: 7878
Joined: Fri Nov 12, 2004 7:48 am

RE: RG With 31 Acft Grounded

Mon Oct 10, 2005 4:01 am

Quoting Hardiwv (Reply 34):
Quoting PPVRA (Reply 33):
JJ signed an agreement with VS that will allow their pax to use VS's lounge in NYC

I mentioned this above. VS and JJ have somehow a similar profile and identical quality airline image. I find a VS + JJ partnerhsip also very likely in the future. JJ could draw on VS intercontinental network to Asia from LHR and VS on JJ market presence in Brazil and deep South America. This is a partnerhsip which has a lot of synergies to develop.

Missed that, my bad. Agree 100% though.

Quoting LipeGIG (Reply 35):
(yesterday Varig run a charter with PP-VRB , a 777-200ER, GIG-CUN with 260 pax).

Some company named Calco chartered one too, but to BUE for new year.



Quoting Hardiwv (Reply 34):
Quoting PPVRA (Reply 33):
If AMS hurts their profits, or lower the number of cycles (delays maintenance requirements).

This is not the case. AMS actually improves RG results to CDG. AMS is responsble for 60% of the cargo on the route to CDG and 20% of the pax.

They can always ship the cargo via FRA or CDG.

Quoting LipeGIG (Reply 35):
Hardi and PPVRA, could be CPH as it's the base of another Star partner (SAS). It will be the same situation of NRT route, i.e. RG drop and SAS nowadays runs LHR-CPH, allowing connections. As per some trip reports, loads on RG LHR-CPH are always less than 40%. Also CPH could be connected thru FRA.

Agree.

Cheers
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
hardiwv
Posts: 4341
Joined: Sat Oct 09, 2004 11:30 pm

RE: RG With 31 Acft Grounded

Mon Oct 10, 2005 4:05 am

Quoting LipeGIG (Reply 35):
could be CPH as it's the base of another Star partner (SAS). It will be the same situation of NRT route, i.e. RG drop and SAS nowadays runs LHR-CPH, allowing connections

Dropping CPH would make more sense if compared to the AMS leg. AMS has shown strong performance on cargo for RG since Martinair Cargo withdrew its GRU-AMS B747F flight.

On the other hand, AMS is easily connectable from LHR with Star partner BMI (as it was done in the pre-RG AMS operations). Maybe we could see both CPH and AMS dropped from the network. AMS shows very poor pax loads (average of 20%, although as I mentioned above average cargo loads are 60% and therefore higher than CDG). Also, dropping AMS would improve loads to LHR and dropping CPH would improve loads on FRA/MUC flights.

Quoting LipeGIG (Reply 35):
BOG shows not so good loads, operation is not daily and the competitor, AV, will run a daily flight very soon

Maybe RG drops GRU-BOG widebody and start operations of BOG-MAO narrow body. Alhtough AV would then capture all high yielding pax.

Quoting LipeGIG (Reply 35):
MEX keeps strong

Indeed, as I mentioned before, MEX keeps strong even after VISA requirements. MEX will keep its two daily MEX-GRU flights (RG + MX/AM) as this route is very strong and links two of the world's more populous cities and top emerging markets. MEX could even see a third player coming into picture. I see this (MEX-GRU) as one of the strongest markets in the future - with or without VISA!

Rgs,
 
LipeGIG
Posts: 5050
Joined: Tue May 03, 2005 7:33 am

RE: RG With 31 Acft Grounded

Mon Oct 10, 2005 4:12 am

Quoting Ghost77 (Reply 37):
And then why would RG downgrade to B767? Apart from the visa issue and aircraft mx problems, they should be sending to MEX an M11 to MEX if a 772 is down, but now that visas are requiered on both sides traffic on route has decreased...

They downgrade MEX due to the lack of widebodies. Nowadays for your info, MIA and MAD both are run with a single M11 (normally 2), BOG will receive a GRU-MAO-BOG with 733, CCS has been downgraded from 763 to 752, and LIS is also runing with 763. Two 772 (including PP-VRD one of the two , other is PP-VRC, which flies MEX route) are on ground waiting for maintenance. PP-VRD is expected to be back on a couple weeks, and i think RG will put it back to MEX (at least while VISA requirements produce a major reduction on the route, RG announce a reduction of 15% a few weeks ago).

There are 5 widebodies out of service (2 M11, 2 772 and 1 763). If all are back, MIA and MAD return to night flight both ways, MEX receive a 772 service back, GIG-FRA receive back the missing 772 and RG would be in condition to increase some flights with 2 763 available.

Regards
Felipe
New York + Rio de Janeiro = One of the best combinations !
 
A342
Posts: 4017
Joined: Sun Jul 31, 2005 11:05 pm

RE: RG With 31 Acft Grounded

Mon Oct 10, 2005 4:13 am

Quoting LipeGIG (Reply 38):
You're 100% correct.

Thanks, and welcome on my RU list !

Quoting LipeGIG (Reply 38):
think that LH have to decide if SCL will be kept on the network, if they will just open a new base at CNF

A new BASE at CNF ? Sorry, but that won´t happen. Maybe you mean a new DESTINATION ?  Smile
Exceptions confirm the rule.
 
LipeGIG
Posts: 5050
Joined: Tue May 03, 2005 7:33 am

RE: RG With 31 Acft Grounded

Mon Oct 10, 2005 5:33 am

Quoting A342 (Reply 42):
A new BASE at CNF ? Sorry, but that won´t happen. Maybe you mean a new DESTINATION ?

Wow, my mistake. Again, you're 100% correct, a new Destination!!!!
Infraero is offering a lot of incentives to see LH in CNF (also will be the only one international flight to CNF). I believe they will be flying CNF in the next 6 months.

Quoting A342 (Reply 42):
Thanks, and welcome on my RU list !

Wow, thanks very much. I see you as a very active member in discussions on MUC and also LH. Very good to see new members with such knowledge. Congratulations! Also, good to know you keep your eyes for brazilian related matters.

Next year i will be in Germany during the world cup. Nice country and people!

Regards,
Felipe
New York + Rio de Janeiro = One of the best combinations !
 
hardiwv
Posts: 4341
Joined: Sat Oct 09, 2004 11:30 pm

RE: RG With 31 Acft Grounded

Mon Oct 10, 2005 5:35 am

Quoting LipeGIG (Reply 43):
also will be the only one international flight to CNF

I assume LB operates two weekly VVI-GIG-CNF, correct? So LH would be the second international regular flights from CNF.

Rgs,
 
LipeGIG
Posts: 5050
Joined: Tue May 03, 2005 7:33 am

RE: RG With 31 Acft Grounded

Mon Oct 10, 2005 6:01 am

Quoting Hardiwv (Reply 44):
I assume LB operates two weekly VVI-GIG-CNF, correct? So LH would be the second international regular flights from CNF.

They have stoped Hardi, about 3 months ago, both GIG and CNF. GIG is expected to resume on the summer, nothing confirmed yet.

CNF keeps no one international service since RG drop the international leg for flight RG8740/8741.

Felipe
New York + Rio de Janeiro = One of the best combinations !
 
ghost77
Posts: 4461
Joined: Wed Mar 01, 2000 2:07 pm

RE: RG With 31 Acft Grounded

Mon Oct 10, 2005 6:11 am

Quoting LipeGIG (Reply 41):

Thank you very much for the information given... it amazes me the fact how RG deals with this issues, IIRC this will make 2 months since I first started reading here all their toruble they had with VRA, VRC and VRD... they don't have money, they're in deep sh*t and instead of giving priority months before and full mx to their widebody fleet in order to make cash and stay in the market with a fiercely JJ and Gol pushing behind they put in jeopardy their future!!

Has there been a similar moment in RG's history worse than the current situation RG is dealing with?


ghost77 APM
Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
 
LipeGIG
Posts: 5050
Joined: Tue May 03, 2005 7:33 am

RE: RG With 31 Acft Grounded

Mon Oct 10, 2005 6:23 am

Quoting Ghost77 (Reply 46):
Thank you very much for the information given... it amazes me the fact how RG deals with this issues, IIRC this will make 2 months since I first started reading here all their toruble they had with VRA, VRC and VRD... they don't have money, they're in deep sh*t and instead of giving priority months before and full mx to their widebody fleet in order to make cash and stay in the market with a fiercely JJ and Gol pushing behind they put in jeopardy their future!!

They expect to receive some cash selling their Cargo operation to a North American Fund, but their Union fill a lot of requests for the Chapter 11 Court postponing the decision. The result: The Fund left the agreement after the 90 days settlement period and RG keep with no cash on hand.

Quoting Ghost77 (Reply 46):
Has there been a similar moment in RG's history worse than the current situation RG is dealing with?

No, never. They lost credit lines due to the Chapter 11. As per RG staff words "If we know that claim for Chapter 11 just to save 11 planes will cost us keep with 15 planes on ground, definitivelly would be better to return the planes, trying to negotiate keep with some of them.". As per some friends on RG, situation was worst two months ago, now with the summer coming, they will be in conditions to improve their cash flow.

Felipe
New York + Rio de Janeiro = One of the best combinations !
 
TP727
Topic Author
Posts: 95
Joined: Sun May 22, 2005 12:21 am

RE: RG With 31 Acft Grounded

Tue Oct 11, 2005 12:57 am

Quoting JJMNGR (Reply 27):
TP727 - What most people don´t know and I can see neither you, is that the episode of Guarapari, the PF the aircraft was a DAC inspector checking the route.....but of course they won´t assume that.

You are right, i did not have that information. But even if i had, the fact that there´s a DAC inspector present, it´s still the captain´s responsibility. Neither the inspector or the DAC has to be blamed for this. A few years back JJ accused a poor teacher of caring a bomb in a F100, and that he exploded it, causing damage to the acft.
I don´t know if you were a JJ employee at the time, but i got very close to the respective acft, along with a few other people (including JJ staff), and there´s no need to be an expert on explosives to conclude that the structural damage was not caused by any bomb. Everyone knew at that time there was no bomb in that acft, and a bomb would have caused a very different damage.
I do think JJ is getting on higher grounds, and that includes your maintence. I do hope to see your airline´s success in every field and hope it gets to every corner of the world.
Also thing that JJ has by far a better managing team (no need to be an expert on that either) that RG, and believe you guys will not make the same mistakes RG did in the past and still do.
Some times i may sound a RG fan, but believe me i have a few reasons to wish RG a very dark future, but i don´t. I am a big fan of any brazilian airline, don´t take me wrong.
Be safe JJMNGR.

TP727
 
Neo
Posts: 730
Joined: Sat Jan 06, 2001 8:21 am

RE: RG With 31 Acft Grounded

Tue Oct 11, 2005 2:23 am

Quoting JJMNGR (Reply 27):
JJ will expand at any destination and at any time possible with the condition to make money! JJ won´t expand to become another VARIG.

Also JJ has plenty capacity to take all intl. VARIG routes (PROFITABLE) and if more aircrafts will be need for this it won´t be a problem also. JJ has credit in the market, a close relationship with Airbus and in a click of the fingers JJ can have the aircrafts. Airbus will be glad!

Hum, I'm not sure I agree. JJ can be in good shape now, but it definetly does not have the capacity today to take over ALL PROFITABLE RG routes in a short-term scenario. If RG was to cease its operations, let's say in July 06, JJ would not be able to get enough aircrafts, to cover RG international routes.
They would probably take over routes like GRU-FRA, GRU-LHR-CPH, GRU-LAX, ... but others like GIG-FRA, GRU-LIS, GRU-MXP, GRU-MEX, GRU-CCS, GRU-BOG, would not be launched for a year or two at least and probably some not at all.

I would actually expect JJ to increase capacity in the routes it already serves, like CDG, MIA, JFK, SCL, EZE, before taking over any RG route.

Also just because RG is profitable in a route, does not necessarily means that JJ would also be. FRA is a good example.

Rgs,

Neo