7LBAC111
Topic Author
Posts: 2427
Joined: Sun Jul 18, 2004 9:17 am

Varig On Verge Of Collapse

Fri Apr 21, 2006 5:32 pm

Source: CWT Global Update

Quote:
The U.S. Embassy has received reports from official visitors and tourists of recent Varig domestic flight cancellations due to the airline's financial difficulties. These cancellations have resulted in missed connecting flights in São Paulo and Rio and have disrupted travelers' itineraries.

In addition, numerous press articles report that Varig will cease operations as they remain unable to restructure its debt

How long before RG are no more? Considering my company along with all other major travel companies I am familiar with, have stopped selling RG with immediate effect, and have begun to rebook/reaccomodate booked passengers in anticipation of an imminent cesation of flights.

7L
Debate is what you put on de hook when you want to catch de fish.
 
MaartenV
Posts: 261
Joined: Wed Aug 10, 2005 6:16 am

RE: Varig On Verge Of Collapse

Fri Apr 21, 2006 6:47 pm

Didn't Variglog express their interest in buying Varig recently? What is the status of their bid?

What happened with the co-operation/take over rumors with TAP?
Its all about supply and demand...
 
7LBAC111
Topic Author
Posts: 2427
Joined: Sun Jul 18, 2004 9:17 am

RE: Varig On Verge Of Collapse

Fri Apr 21, 2006 7:43 pm

More information from the GB Foreign Office:

Quote:
The Brazilian airline, Varig, is in serious financial difficulty. Several flights, international and internal, have been cancelled or delayed in recent weeks. Varig is a private sector company, and the Brazilian government has said that it will not bail it out; there is therefore an imminent risk of collapse. You should take this into account when booking air travel, and consider the alternative options.

7L
Debate is what you put on de hook when you want to catch de fish.
 
Billy
Posts: 890
Joined: Sun Jul 23, 2000 11:18 pm

RE: Varig On Verge Of Collapse

Fri Apr 21, 2006 8:04 pm

I have just read that they are transferring all of their Portuguese flights to TAP effective May. Does TP have the capacity to absorb this amount of traffic?
 
jog
Posts: 262
Joined: Fri Jul 08, 2005 7:40 am

RE: Varig On Verge Of Collapse

Fri Apr 21, 2006 8:12 pm

Quoting Billy (Reply 3):
Does TP have the capacity to absorb this amount of traffic?

Yes as they will expand operations to Brazil beginnig 8th May. For details see RE: TP Expands In GRU, GIG And EWR (by HB-IWC Apr 19 2006 in Civil Aviation)
 
EurostarVA
Posts: 1205
Joined: Thu May 16, 2002 12:24 am

RE: Varig On Verge Of Collapse

Fri Apr 21, 2006 8:33 pm

I am very saddened by these developments....looks like the forces of economics and good public governance will lead to RG's disappearance...after decades of proudly flying Brazil's flag with style.

TAM and GOL will move quickly to absort RG's international route network.
If there is a will, there is a way
 
TBCITDG
Posts: 851
Joined: Sat Jan 10, 2004 5:17 am

RE: Varig On Verge Of Collapse

Fri Apr 21, 2006 9:28 pm

I wonder who we will see first in FRA?
I presume more than likely TAM although they will be in need of more aircraft.
If TAM play their cards right, they will quickly become Latin Americas number 1 carrier!!
 
UAL777UK
Posts: 2133
Joined: Sun Nov 20, 2005 1:16 am

RE: Varig On Verge Of Collapse

Fri Apr 21, 2006 9:54 pm

oooh, Varigs dissapearance will be a headache for star alliance. I still think some knight in shining armour will come in and take over the company, or let it collapse and then restart it a bit like Swiss??
 
AF022
Posts: 1633
Joined: Fri Dec 26, 2003 10:41 pm

RE: Varig On Verge Of Collapse

Fri Apr 21, 2006 11:33 pm

Varig's management is pathetic. Years of comically poor mismanagement will kill RG in the end.
 
7LBAC111
Topic Author
Posts: 2427
Joined: Sun Jul 18, 2004 9:17 am

RE: Varig On Verge Of Collapse

Fri Apr 21, 2006 11:42 pm

Quoting AF022 (Reply 8):
Varig's management is pathetic. Years of comically poor mismanagement will kill RG in the end.

Get away?! Hold the front page .... Big grin

7L
Debate is what you put on de hook when you want to catch de fish.
 
boeingbus
Posts: 1509
Joined: Sat May 29, 2004 12:37 am

RE: Varig On Verge Of Collapse

Fri Apr 21, 2006 11:45 pm

All flights to Portugal were cancelled. This is according to

http://www.forbes.com/markets/feeds/afx/2006/04/21/afx2686530.html

TP is going to be even busier... Poor RG...
Airbus or Boeing - it's all good to me!
 
User avatar
Zkpilot
Posts: 3700
Joined: Wed Mar 08, 2006 8:21 pm

RE: Varig On Verge Of Collapse

Fri Apr 21, 2006 11:59 pm

Quoting UAL777UK (Reply 7):
oooh, Varigs dissapearance will be a headache for star alliance. I still think some knight in shining armour will come in and take over the company, or let it collapse and then restart it a bit like Swiss??

sure will... what with LA being so dominant is South America already. Perhaps AR will join star along with either TAM or GOL...
56 types. 38 countries. 24 airlines.
 
Mexicana757
Posts: 2635
Joined: Fri Apr 20, 2001 3:21 pm

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 12:00 am

I wish Varig the best. Lets see how much longer the airline will last until it has to shut down.  frown 
 
bmacleod
Posts: 2502
Joined: Sat Aug 25, 2001 3:10 am

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 12:02 am

VASP  tombstone 
RG next in line????

So what other airlines are in Brazil? There must be at least one LCC...
"What good are wings without the courage to fly?" - Atticus
 
EurostarVA
Posts: 1205
Joined: Thu May 16, 2002 12:24 am

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 1:56 am

TRANSBRASIL - deceased
VASP - deceased
VARIG - on life support

Quoting Zkpilot (Reply 11):
sure will... what with LA being so dominant is South America already. Perhaps AR will join star along with either TAM or GOL...

Buenos Aires is too southerly to contribute significantly to a major airline alliance. The geographical location of Rio or Sao Paulo is much more favorable.
If there is a will, there is a way
 
JJMNGR
Posts: 924
Joined: Wed May 26, 2004 9:06 pm

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 5:11 am

Quoting MaartenV (Reply 1):

Didn't Variglog express their interest in buying Varig recently? What is the status of their bid?

What happened with the co-operation/take over rumors with TAP?

The propose of VARIGLOG was ridiculous. They want to but only the good things of VARIG (IF THERE IS SOME....) and all debits, all problems won't be their responsibility....hahaha to buy an airline like this, even I want too.
This is juts part of this never ending soap opera.

VARIG announced today officially that they will stop serving PORTUGAL and this will begin to be done on code-share with TAP.

Quoting Bmacleod (Reply 13):
SP
RG next in line????

So what other airlines are in Brazil? There must be at least one LCC...

Sorry , I don´t want to be rude, but in what planet are you? You are the ones the think VARIG means Brazil and there is nothing else?

Quoting EurostarVA (Reply 14):
Buenos Aires is too southerly to contribute significantly to a major airline alliance. The geographical location of Rio or Sao Paulo is much more favorable.

TAM will increase its actual frequencies to EZE to 08 flights a day!
 
User avatar
LTU932
Posts: 13072
Joined: Fri Jan 06, 2006 12:34 am

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 5:19 am

Quoting Zkpilot (Reply 11):
Perhaps AR will join star along with either TAM or GOL...

I don't know about AR, but JJ would rather be a prime candidate for SkyTeam IMO.

Quoting EurostarVA (Reply 14):
TRANSBRASIL - deceased
VASP - deceased
VARIG - on life support

Or let's say VP is in suspended animation, because there are actually people who want to restore the estate of VP and restart operations. There is even a recovery plan posted on their website. I personally doubt VP will ever fly again.

http://www.vasp.com.br (Portuguese Only)

Quoting JJMNGR (Reply 15):
VARIG announced today officially that they will stop serving PORTUGAL and this will begin to be done on code-share with TAP.

Why are they stopping service to Portugal now? Do they have an even bigger lack of equipment or were the yields too bad? I don't understand why RG now leaves Portugal.
 
EddieDude
Posts: 6215
Joined: Fri Nov 14, 2003 10:19 am

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 7:05 am

Quoting JJMNGR (Reply 15):
TAM will increase its actual frequencies to EZE to 08 flights a day!

Wow! 8 dailies only by JJ is a lot. I am guessing JJ will use mostly 2-class A320's in this route. Does JJ have a lot of domestic flights ex-GRU or will passengers have to take the shuttle bus to CGH for connections?

Quoting LTU932 (Reply 16):
JJ would rather be a prime candidate for SkyTeam

Recently I read in a magazine (not sure if it was Voyages D'Affaires) that JJ and AF was relaunching their commercial relationship and that this could be seen as an indication of AF thinking about courting JJ into SkyTeam. What do you guys think? This would be awesome!
Next flights: MEX-LAX AM 738, LAX-PVG DL 77L, SHA-PEK CA 789, PEK-PVG CA A332, PVG-ORD MU 77W, ORD-MEX AM 738
 
ReverseThrust
Posts: 109
Joined: Sun Jan 02, 2005 8:24 pm

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 7:35 am

Noooooooooooooooo!!! I have my first ever MD-11 flight with Varig from Heathrow to Copenhagen and back at the end of May 06!

I am so keeping my fingers crossed that RG at least manage to hold out until then. My camera will be going mad getting shots if I am lucky enough to still get my rocket ride.
Flown MD11/81/82/83/87/90,B732/733/734/735/737W/738/739/742/752/753,F70/100,A300/319/320/321/332/333/343,TU134A/154M,L10
 
shane
Posts: 188
Joined: Sat Oct 08, 2005 2:38 am

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 8:29 am

I just flew Varig GIG --> GRU --> JFK last week. Though the condition of the 777 was awful inside, I'm glad I had the chance while the airline was alive...
 
Velasco
Posts: 94
Joined: Sun Jan 09, 2005 1:28 pm

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 10:01 am

Looks like the end is near. Flew on VG to Cidade da Praia (Cape Verde) 2 weeks ago on a code-share with TACV. A very messy plane. TAM remains my favourite. Still, it's awkward to watch such an airline dissapear.
Lisboa-Rio on the A340... São Pedro e São Paulo down below...
 
JJMNGR
Posts: 924
Joined: Wed May 26, 2004 9:06 pm

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 10:32 am

Quoting LTU932 (Reply 16):
Why are they stopping service to Portugal now? Do they have an even bigger lack of equipment or were the yields too bad? I don't understand why RG now leaves Portugal.

I´m surprised about your question. Why they are leaving Portugal now? They are broken. Portugal is just one route in the middle of some others already abandoned.

Quoting EddieDude (Reply 17):
Wow! 8 dailies only by JJ is a lot. I am guessing JJ will use mostly 2-class A320's in this route. Does JJ have a lot of domestic flights ex-GRU or will passengers have to take the shuttle bus to CGH for connections?

TAM has its flights going out of GRU and CGH. All depends to where you need to go. But all intl flights for sure out of GRU. Yes, all intl. flights with A320 operated by a two class configuration.
 
User avatar
LTU932
Posts: 13072
Joined: Fri Jan 06, 2006 12:34 am

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 10:54 am

Quoting JJMNGR (Reply 21):
I´m surprised about your question.

That's because I was surprised about the announcement in the first place.  Wink

Quoting JJMNGR (Reply 21):
Why they are leaving Portugal now? They are broken. Portugal is just one route in the middle of some others already abandoned.

So simply because they're broke, they're axing a route that was somewhat profitable, with all the Portugal-Brazil traffic that exists through TP as well? I would have thought that either they'd drop routes which are highly unprofitable and reduce frequencies in other routes that do make some money.

That being said, now that RG is leaving the Portuguese market to TP, is there perhaps a way JJ could step in and start for example GIG-GRU-LIS?
 
ghost77
Posts: 4461
Joined: Wed Mar 01, 2000 2:07 pm

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 10:58 am

Quoting JJMNGR (Reply 15):
VARIG announced today officially that they will stop serving PORTUGAL and this will begin to be done on code-share with TAP.

Why Portugal? Isn't Portugal one of the most important countries RG serves? Or at least a country where they could gain more pax than flying to other cities... why not closing MUC, CPH, MEX or MAD first.. and just leaving a few routes to Europe, that is, LIS, LHR, FRA...

So sad for RG! Once the biggest in Latam and now everything will soon be over... JJ get ready!

g77 APM
Ricardo Morales - flyAPM - ¡No es que maneje rapido, solo estoy volando lento!
 
CXA330300
Posts: 1258
Joined: Wed May 26, 2004 5:51 am

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 11:00 am

Well......this has been expected for a long time.......but *A will lose most of their LA network and an airpass............and there will be thousands of stranded passengers........RIP Varig.........

Quoting ReverseThrust (Reply 18):
Noooooooooooooooo!!! I have my first ever MD-11 flight with Varig from Heathrow to Copenhagen and back at the end of May 06!

Don't count on getting on it.
AC/AA/UA/DL/B6/WN/US*/CO*/FI/BA/IB/AF/SK/LX/Sabena*/TK/LY/SA/MN/SW/AM/CE*/CX/CA/MU/JL/SQ/TG/MH/KA/5J
 
commavia
Posts: 9744
Joined: Mon Apr 25, 2005 2:30 am

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 11:02 am

Quoting Ghost77 (Reply 23):
Why Portugal?

My guess is that they probably felt that, given their new close cooperation with TP, it would be easier to cancel LIS and dump the passengers onto TP. RG can reaccomodate all of its passengers on its new partner TP, whereas cancelling, say, CDG or LHR would be more challenging to get passengers onto other airlines with which TP is not as closely associated. That being said, unfortunately, at least from my perspective, RG may just have the opportunity to work out those reaccomodation with other airlines besides TP.
 
User avatar
LH463
Posts: 68
Joined: Sun Apr 02, 2006 6:51 am

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 12:19 pm

Must have been all that import substitution industrialization  Wink
Turning final...
 
User avatar
LTU932
Posts: 13072
Joined: Fri Jan 06, 2006 12:34 am

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 1:33 pm

Quoting Ghost77 (Reply 23):
Why Portugal? Isn't Portugal one of the most important countries RG serves? Or at least a country where they could gain more pax than flying to other cities... why not closing MUC, CPH, MEX or MAD first.. and just leaving a few routes to Europe, that is, LIS, LHR, FRA...

My thoughts exactly, Ricardo.

Quoting Commavia (Reply 25):
from my perspective, RG may just have the opportunity to work out those reaccomodation with other airlines besides TP.

I'll have to agree on this as well. It seems to me that RG is getting desperate. Had they planed this earlier on, then LIS might still remain on the routemap. Regarding the examples Ricardo just mentioned, CPH can easily be reached through a codeshare with SK either out of LHR or FRA, while MAD can also be easily reached with a TP codeshare.

That being said, and as much as I'd hate that all the employees lose their jobs because of this, maybe RG should just declare bankruptcy and cease operations. It's always sad to see one of the major airlines to go under, but given the situation right now, perhaps it's time for them to call it quits and let the Varig brand continue to live through Varig Log.
 
LatinPlane
Posts: 2471
Joined: Mon Dec 27, 1999 11:05 am

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 3:07 pm

Quoting LTU932 (Reply 27):
perhaps it's time for them to call it quits and let the Varig brand continue to live through Varig Log.

So sad, but I think that's whats going to end up happening!

Although, if you think about it, let's suppose that VARIG LOG starts looking into leasing passenger aircraft right now given that they highly believe there is room for growth and new opportunity to enter this market in the very near future. They're already a cargo airline, so how much time would it take for it to go through the paperwork with the Brazilian government for an application to start passenger service, given that technically, they already fulfill much of the necessary requirements?

Then, it waits for the day that VARIG croaks, and as soon as this occurs, it competes with TAM/GOL/Ocean Air for ONLY the most important destinations flown by VARIG. As soon as Varig actually stops flying, they would just hire some of the ex-employees - no need to train them! Purchase some of VARIG's infrastructure (for 1/2 the price), signs new leases for some of the planes VARIG currently operates: Presto the new VARIG!

They can officially call themselves VARIG LOG, and nobody would know the difference. VARIG's name is saved, albeit with a much smaller and leaner operation that flies to only the most profitable destinations.

Would this theory work? Given that VARIG LOG is actually, legally a different company that also owns the VARIG name, but has nothing to do with the liabilities of the original VARIG. VARIG LOG finds the financing to grow 300% within a month's time, and given that the Brazilian government cooperates in this scheme so as to save face to make it appear that the VARIG name actually never disappeared.


 Smile LatinPlane
Pan Am - The World's Most Experienced Airline.
 
drinkstrolley
Posts: 484
Joined: Tue May 10, 2005 10:50 pm

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 5:25 pm

Old news.

http://news.bbc.co.uk/1/hi/business/4902792.stm

[Edited 2006-04-22 10:26:25]
 
GSM763
Posts: 573
Joined: Sat Jan 07, 2006 3:35 am

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 5:52 pm

A bit O.T but a friend who flew a Varig domestic flight recently told me that there were only about 25 PAX on board an aircraft with about 150 seats. They can't last long with such load factors.
 
LipeGIG
Posts: 5050
Joined: Tue May 03, 2005 7:33 am

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 7:33 pm

Quoting Ghost77 (Reply 23):
Why Portugal? Isn't Portugal one of the most important countries RG serves? Or at least a country where they could gain more pax than flying to other cities... why not closing MUC, CPH, MEX or MAD first.. and just leaving a few routes to Europe, that is, LIS, LHR, FRA...

Ricardo, the main problem is the lack of aircraft. Two days ago a RG 777 (PP-VRI) face a problem (loss of oil in one of the engines) when runing MXP-GRU-GIG and landed at LPA (where the aircraft is waiting for maintenance, and as per the info i obtain, need to change the engine something that other 4 are waiting for). But the decision to drop LIS was made before this problem and probably looking for MIA and JFK (and the profitable high season to the United States).

Quoting LTU932 (Reply 22):
That being said, now that RG is leaving the Portuguese market to TP, is there perhaps a way JJ could step in and start for example GIG-GRU-LIS?

Hi LTU, JJ just announce their flight (without a given date) to London to where they will need 2 aircrafts. Even with the change at CDG they do not have a huge fleet for flights to Europe and North America (Tam leases 10 A332, 7 are under JJ collors and 3 at Etihad). One of the birds, MVB is really closer to it's D Check and others will follows (except MVL, the brand new A332 received this year). Also, TP get the last A332 available in the market and i doubt Airbus can deliver a plane in less than 9 months.

Quoting EddieDude (Reply 17):
Wow! 8 dailies only by JJ is a lot. I am guessing JJ will use mostly 2-class A320's in this route. Does JJ have a lot of domestic flights ex-GRU or will passengers have to take the shuttle bus to CGH for connections?

Hi Eddie, JJ has flights to/from GRU for almost all main markets (POA, FLN, CWB, GIG, VIX, SSA, REC, FOR, NAT, BSB-MAO, CNF, IGU, JPA). And they keep service to EZE from BSB-POA and GIG also, and i believe none of the new flights to EZE will be non stop from GRU.

Quoting EddieDude (Reply 17):
Recently I read in a magazine (not sure if it was Voyages D'Affaires) that JJ and AF was relaunching their commercial relationship and that this could be seen as an indication of AF thinking about courting JJ into SkyTeam. What do you guys think? This would be awesome!

Eddie, i believe they are even closer to OW now that JJ announce the new route to London. They are now using 3 OW hubs (Miami/AA, Santiago/LA and London/BA) as well as not to forget New York !
Also, they have 3 daily flights (soon) to the USA that could become 4 (a daily light JFK flight could be done) and SkyTeam does not have strong operation at MIA. On the other size, they could lose CDG...
But i still believe JJ will be a sole player with a lot of agreements.

Felipe
New York + Rio de Janeiro = One of the best combinations !
 
Rafabozzolla
Posts: 968
Joined: Sun Apr 30, 2000 1:27 pm

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 8:35 pm

JJMNGR,

Can U give some more info on the new EZE flights?
 
TWAviator
Posts: 17
Joined: Thu Dec 22, 2005 3:01 pm

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 8:53 pm

Quoting Bmacleod (Reply 13):
So what other airlines are in Brazil? There must be at least one LCC...

JJ,
GOL,
OCEAN AIR,
BRA

Both BRA and GOL are LCC's



regards

TWAviator
The most confortable way to fly
 
sunshine79
Posts: 1559
Joined: Fri Jan 06, 2006 8:02 am

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 9:10 pm

Quoting ReverseThrust (Reply 18):

Myself and a few other n.netters are doing the same flight on 19th May for the CPH meet. Let�s just keep our fingers crossed that they last until then. I fear this will be my one and only chance to fly and MD11.
Formerly alcregular, Why drive when you can fly?
 
photolppt
Posts: 531
Joined: Wed Jul 07, 2004 6:17 pm

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 9:50 pm

Quoting Ghost77 (Reply 23):
Why Portugal? Isn't Portugal one of the most important countries RG serves?

In one word: StarAlliance.

And although the brazilian comunnity here is huge, it is a very low yeld route for RG. Also the 40+ weekly TP flights to Brazil make for heavy competition on the route.  Smile

LIS is increasing its importance as a min-hub for TP and its Brazil flights. Did you know around 80% of pax on its MXP and FCO flights connect to GRU and GIG?
 
CB777
Posts: 1135
Joined: Wed Sep 08, 1999 8:13 am

RE: Varig On Verge Of Collapse

Sat Apr 22, 2006 10:26 pm

On a side note if Varig does collapse, Continental is desperately looking for
additional 777's---Varig's VRA and VRB would be a perfect fit.
 
ReverseThrust
Posts: 109
Joined: Sun Jan 02, 2005 8:24 pm

RE: Varig On Verge Of Collapse

Sun Apr 23, 2006 3:17 am

Hey Sunshine 79.

I'm flying a week later on 26th! Fingers crossed buddy. I hope your ride is good and the MD-11 still takes you. Was great value for money - even beating EasyJet - I know what I'd rather fly on.
Flown MD11/81/82/83/87/90,B732/733/734/735/737W/738/739/742/752/753,F70/100,A300/319/320/321/332/333/343,TU134A/154M,L10
 
User avatar
LTU932
Posts: 13072
Joined: Fri Jan 06, 2006 12:34 am

RE: Varig On Verge Of Collapse

Sun Apr 23, 2006 3:29 am

Quoting LipeGIG (Reply 31):
Hi LTU, JJ just announce their flight (without a given date) to London to where they will need 2 aircrafts. Even with the change at CDG they do not have a huge fleet for flights to Europe and North America (Tam leases 10 A332, 7 are under JJ collors and 3 at Etihad). One of the birds, MVB is really closer to it's D Check and others will follows (except MVL, the brand new A332 received this year). Also, TP get the last A332 available in the market and i doubt Airbus can deliver a plane in less than 9 months.

Hi Felipe. Of course if JJ is lacking the aircraft, they cannot start it, but eventually they can. It doesn't have to be immediately, but rather once the aircraft are available.

And speaking of GRU-LON, did JJ finally get slots at LHR or will they have to settle for LGW and probably wait until RG folds, so they can buy out the LHR slots from RG?
 
shane
Posts: 188
Joined: Sat Oct 08, 2005 2:38 am

RE: Varig On Verge Of Collapse

Sun Apr 23, 2006 4:34 am

If I were a wealthy, airline-focused investor, I'd turn Varig into an all-international airline serving Europe and the USA with 777s only (maybe going back to NRT and China at some point), and save a few of the best 737s for a few key Latin American routes. Gol and Tam can serve the domestic market and codeshare w/Varig (already done w/Tam). Replace all the mgmt, of course. Where's Richard Branson when we need him? What are the foreign ownership laws in Brasil?
 
noelg
Posts: 2313
Joined: Fri Apr 26, 2002 11:39 pm

RE: Varig On Verge Of Collapse

Sun Apr 23, 2006 5:14 am

Quoting ReverseThrust (Reply 18):
Noooooooooooooooo!!! I have my first ever MD-11 flight with Varig from Heathrow to Copenhagen and back at the end of May 06!

Myself and my wife are due to be taking this flight too on 19 May, I really hope they don't pull CPH or LHR before then and rebook us on another carrier - can't be doing with driving all the way to London for a flight on SK or BA when I could go from MAN!

At least if they go belly up we can claim on our travel insurance and get the money back - fingers crossed!

Noel
 
PDPsol
Posts: 1109
Joined: Fri Feb 20, 2004 5:09 am

RE: Varig On Verge Of Collapse

Sun Apr 23, 2006 5:35 am

Quoting Shane (Reply 39):
If I were a wealthy, airline-focused investor, I'd turn Varig into an all-international airline serving Europe and the USA with 777s only (maybe going back to NRT and China at some point), and save a few of the best 737s for a few key Latin American routes. Gol and Tam can serve the domestic market and codeshare w/Varig (already done w/Tam). Replace all the mgmt, of course. Where's Richard Branson when we need him? What are the foreign ownership laws in Brasil?

Several caveats to your comments.

RG and JJ cancelled their code-sharing arrangement over a year ago; this is an important reason why RG's demise has accelerated over the past year. Also, RG's corporate governance has been disastrous, with the FRB failing in its fiduciary responsibility to RG's shareholders AND creditors.

Foreign investors cannot hold over 20% in a Brazilian carrier. As has been endlessly described here, MatlinPatterson, a NYC-based private equity firm specializing in international distressed investments, has formed an investment consortium with a Brazilian partner to acquire VarigLog. A Brazilian judge recently ruled this transaction does not comply with existing norms; the transaction has not closed.

The international market is growing rapidly. Nonetheless, all major international carriers serve GRU [major hub] and, to a lesser extent, GIG. Also, JJ offers a superior product to RG and operates flights to:

GIG-GRU-JFK, to be upgraded to daily next month
GRU-MIA, twice daily
GRU-CDG, daily
GIG-LHR/LGW, airport selection and start date to be announced soon

plus, service from MIA to MAO and Northeast connections
extensive services to major regional destinations, SCL and EZE
regional services to Bolivia
PZ services to MVD and PDP
 
Avianca
Posts: 5273
Joined: Tue Jan 25, 2005 5:33 am

RE: Varig On Verge Of Collapse

Sun Apr 23, 2006 5:44 am

Quoting Ghost77 (Reply 23):
Why Portugal? Isn't Portugal one of the most important countries RG serves? Or at least a country where they could gain more pax than flying to other cities... why not closing MUC, CPH, MEX or MAD first.. and just leaving a few routes to Europe, that is, LIS, LHR, FRA...

So sad for RG! Once the biggest in Latam and now everything will soon be over... JJ get ready!

g77 APM

thought first also the same... but at least they can code-share to Portugal on TP metal, not to places like MUC, CPH, MEX or MAD, at least not for nonstops.
Colombia es el Mundo Y el Mundo es Colombia
 
JJMNGR
Posts: 924
Joined: Wed May 26, 2004 9:06 pm

RE: Varig On Verge Of Collapse

Sun Apr 23, 2006 9:42 am

Guys, here I go,

RG is leaving Portugal because they loose money on the Iberic Peninsula since they started to fly there...not only Portugal but also Spain. The fact flights are full of pax, doesn't mean they are making money. Flights full of pax was never a sign of profitability.

There is not chance for instance for TAM to start a flight to Portugal. It was already told the Government, that if RG give up routes, or even close their doors, TAM will only fly to those destinations where a market analysis brings the confident of being a profitable operation. To start a reoute or replace RG just for patriotism and loose money, TAM will not do it.

It is not official but seems TAM found 01 A332 for a short term lease while the fleet goes through maintenance.

The route to LON will be operatd in OCT for sure. The day yet being decided together with the slots, but there is a big, really big chance tooperate LHR iso LGW.

Last week, there was an information on the Brazilian papers, stating that TAM has already 18 aircrafts reserved in case it will have to assume a more strong intl. operation due to VARIG. This is so strategic, that nobody talks about this in the company so this information on the papers can't be confirmed.

About the new frecuencies to EZE were authorized and really are going to be increased to 8 x day but there is nothing else yet. What I know is some more A320 are being converted to a 2 class configuration, aslo for the 3rd daily flight to MIA with A320.
 
fsimmer
Posts: 104
Joined: Mon Jun 07, 1999 11:18 am

RE: Varig On Verge Of Collapse

Sun Apr 23, 2006 10:10 am

I just flew RG from GIG to GRU on the second half of a roundtrip on the 19th of april. My outbound leg GRU to GIG on the 28th of march was cancelled and I was rebooked on GOL, which was superior to the service Varig provided. The MD11 that flew us from GIG to GRU was filthy and smelly inside. The flight was also an hour delayed.

I just came back from a business trip in Brazil where my company is trying to take over and get a poorly managed helicopter company back on it's feet, so I have seen a little bit of this airline mismanagment myself.
fsimmer
 
varig_dc10
Posts: 330
Joined: Wed Aug 08, 2001 2:21 pm

RE: Varig On Verge Of Collapse

Sun Apr 23, 2006 3:52 pm

As a child I flew loads of flights on Varig DC10's in the late 70's.

The interiors were never dirty and the service was excellent.

I used to get to see the cockpit on every flight.

Shame about Varig.

I like the new livery, but this will always be the best...


View Large View Medium
Click here for bigger photo!

Photo © Eduard Marmet



varig_dc10
 
TAL727
Posts: 19
Joined: Fri Oct 07, 2005 6:27 pm

RE: Varig On Verge Of Collapse

Sun Apr 23, 2006 4:49 pm

In deed, Varig is pretty close to bankruptcy. Cancelling the flight to LIS is just a tactical move on a low yield route.

TP would like to buy 20% of Varig, which is the maximum allowed for foreign companies in Brazil. However as time passes the deal is becoming less and less interesting... From my perspective I see no other credible solution for Varig. TP's CEO knows what he is doing, was previously the CEO from Varig and has done a decent job.

Of course RG has formidable competitors: TAM full service and GOL low cost and it is really squeezed between the two. If TAM joins Skyteam things will only get worse...

It is just a shame that the situation reached this point, but competition does not forgive management errors or distractions. Besides other Brazilian airlines, TP will profit from the situation by transferring pax in LIS, despite terrible airport service...

Regards,

TAL
 
User avatar
SQ773
Posts: 193
Joined: Fri Apr 15, 2005 7:24 pm

RE: Varig On Verge Of Collapse

Sun Apr 23, 2006 7:03 pm

Talking about the low yield passanger traffic from Portugal to Brazil, now that TP will serve this route on a monopoly basis, will they increase their fares significantly ?

I cannot imagine one single airline serving such route as LIS-GRU or LIS-GIG .
It is as if IB would fly alone MAD-EZE. They would do whatever they�d want with the fares I guess...

So sad to see RG in this situation.

Rgds
 
ReverseThrust
Posts: 109
Joined: Sun Jan 02, 2005 8:24 pm

RE: Varig On Verge Of Collapse

Sun Apr 23, 2006 7:24 pm

Quoting NoelG:

I see your point. If it all went pear-shaped, I'd rather go with SAS - at least they are in StarAlliance. If it was BA  vomit  I'd want a refund!
Flown MD11/81/82/83/87/90,B732/733/734/735/737W/738/739/742/752/753,F70/100,A300/319/320/321/332/333/343,TU134A/154M,L10
 
PRAirbus
Posts: 687
Joined: Wed Apr 20, 2005 11:59 pm

RE: Varig On Verge Of Collapse

Sun Apr 23, 2006 8:37 pm

RG has been cancelling its MIA flight on and off the past couple of days...not a good sign.  Sad

Who is online