Brasuca
Topic Author
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Air Canada Buying A Stake Of Varig

Thu Aug 24, 2006 11:31 pm

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
 
Salomon
Posts: 191
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RE: Air Canada Announcement To Buy A Stake Of Varig

Thu Aug 24, 2006 11:40 pm

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.
 
hardiwv
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RE: Air Canada Announcement To Buy A Stake Of Varig

Thu Aug 24, 2006 11:42 pm

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,
 
hardiwv
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RE: Air Canada Buying A Stake Of Varig

Thu Aug 24, 2006 11:43 pm

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,
 
Steelhead
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RE: Air Canada Buying A Stake Of Varig

Thu Aug 24, 2006 11:46 pm

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.
 
squared
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RE: Air Canada Buying A Stake Of Varig

Thu Aug 24, 2006 11:53 pm

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
 
hardiwv
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RE: Air Canada Buying A Stake Of Varig

Thu Aug 24, 2006 11:55 pm

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]
 
AF454GRU
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 12:00 am

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!
 
squared
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 12:02 am

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
 
WINGS
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 12:04 am

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.
 
krisyyz
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 12:05 am

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
 
leelaw
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 12:08 am

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
Lex Ancilla Justitiae
 
hardiwv
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 12:10 am

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,
 
FLYACYYZ
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 12:53 am

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
 
Steelhead
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 1:17 am

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 ?
 
jetlanta
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 1:27 am

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.
 
sebring
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 1:36 am

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.
 
Gr8Circle
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 1:43 am

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
 
krisyyz
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 1:52 am

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
 
9252fly
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 2:10 am

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.
 
Brasuca
Topic Author
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 3:47 am

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
 
FLYACYYZ
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 3:58 am

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
 
HanginOut
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 4:21 am

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
 
FLYACYYZ
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 4:24 am

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
 
bman351
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 5:07 am

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...
 
9252fly
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 5:43 am

Quoting Bman351 (Reply 24):
I think AC is dumping some orders for Embraers because they're unhappy with the results of them.

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 varying opinions. The economics of the aircraft are excellent as well as the acquisition costs.

[Edited 2006-08-24 22:44:26]
 
FLYACYYZ
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 6:22 am

Quoting Bman351 (Reply 24):
I think AC is dumping some orders for Embraers because they're unhappy with the results of them

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 pilots I've flown with seem to love the aircraft.
Above and Beyond
 
PDPsol
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 6:35 am

Quoting 9252fly (Reply 25):
I don't think AC is unhappy with them,more a case of working the bugs out of this new aircraft.

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 have systems issues and the like.

Regarding the transfer of six AC delivery slots to RG, I would assume this has less to do with AC being "unhappy" with the E190 and more to do with carrier's market needs and timing.

Nonetheless, I agree this will turn out to be a favorable investment for AC. AC is unique in that it already possesses significant experience investing in restructured carriers [CO and US] and I have no doubt it will put this experience to good use at RG.

RG's problems were ALWAYS related to its abysmal, horrible corporate governance. With new shareholders dedicated to enhancing the carrier's efficiency and realizing the strategic potential of its commercial franchise, RG may one day resume its proud position as a leading carrier for the region.

Let's hope ANAC promptly grants AC and TP authorization to realize their investment in RG, allowing the carrier to rebuild its fleet and expand its market position.
 
FLYACYYZ
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 6:44 am

Quoting Pdpsol (Reply 27):
RG's problems were ALWAYS related to its abysmal, horrible corporate governance

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 be adjusted and rationalized, layover cycles will be optimized. I know it, because we live it.
Above and Beyond
 
aircanada014
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 6:44 am

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 Varig? if they are thats great news too. Nice to see AC helping out. Have any airline companies did this before transfering some of their order slots to their counterparts? If not this will be the first time AC transfering some of their EMB orders to Varig. I wish Varig and AC good luck..
 
FLYACYYZ
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 6:50 am

Quoting AirCanada014 (Reply 29):
Nice to see AC helping out.

Definitely promising for the New Varig, but not exactly a benevolent act. It's all about $$$$$$$, and a return on an investment.
Above and Beyond
 
connies4ever
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 7:09 am

Quoting FLYACYYZ (Reply 13):
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.



Quoting Jetlanta (Reply 15):
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.

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 Varig's market share away -- and frequently with brand-new kit, fresh staff who haven't been through the wars, yadda yadda.

AC has done well with the CO & HP/US investments, so I hope they know what they're doing.

As for 767s to Varig, AC is pretty tight on them right now -- perhaps it means the 343s will hang around a bit longer after the 777s arrive. Freeing E190 slots for Varig is good politics/marketing and perhaps indicates ACs appetite for E190s was a little bigger than the market could absorb.
Nostalgia isn't what it used to be.
 
ricardofg
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 7:32 am

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 already!
 
9252fly
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 7:37 am

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 aircraft. If AC introduces 7 new B773 aircraft in 12 months,that could certainly be an option.
 
MCOflyer
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 8:47 am

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
Never be afraid to stand up for who you are.
 
FMAL
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 10:05 am

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-enthusiast ones, if you ask them around they'll say that the national market is the mess that it is now, the high priced mess, because of Varig's reduced network.

TAM and Gol have been very aggressive in filling in RG's share, true. But prices have gone up, delays from TAM and Gol are constant, and the average passenger say "When Varig was around, this didn't happen". Little by little, Varig is starting to show that it is back on the air. Flying a smaller network, but really flying it. I see executives at my work starting to ask their secretaries to look for RG tickets again, on the SDU-CGH shuttle and also to other destinations (they ask "is Varig flying to POA again?"). My boss today came from Curitiba on TAM. He had to connect in CGH. He said that Varig's ticket counter was full, while TAM was again a disgrace (he traveled to POA last week, on TAM), with lack of customer service, delays, long and messy lines.

Well, all that just to say, I think the customer's preference still lays with RG. The average passenger here wishes that Varig gets back on its feet. They associate RG with proper customer service, with a proper airline (they surely remember the good old 70's, 80's and 90's).
 
AC320tech
Posts: 193
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 10:54 am

Quoting KrisYYZ (Reply 10):
but I thought AC is still in need of B767's, they leased additional aircrafts just last year.



Quoting FLYACYYZ (Reply 13):
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,

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.

Quoting KrisYYZ (Reply 10):
anyword if they will be -300ER or 200ERs?

Probably -300's cause RG already operates them.
 
virgin747
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 2:04 pm

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 create a program to make Air Canada planes cost effective. After all that work, the folks at the top are going to run off and try to take part in another airline, just like they did with Canadian... (Although Canadian wasnt a bad idea) And get hit just like Canadian did when CP bought all the small airlines... Also who is going to run the show? I know its only 10%... but that does add up if the new Varig goes belly up. Does ACE expect its 10% to be run like Air Canada??(Paper wine boxes, removing maitanance access stairs in its 320 family).

I know this is gonna sound opposite of what I just said... but South America seems like a good market... But i'm sure Air Canada/United could have done it another way...
 
hardiwv
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 4:27 pm

Quoting Pdpsol (Reply 27):
Nonetheless, I agree this will turn out to be a favorable investment for AC. AC is unique in that it already possesses significant experience investing in restructured carriers [CO and US] and I have no doubt it will put this experience to good use at RG.

RG's problems were ALWAYS related to its abysmal, horrible corporate governance. With new shareholders dedicated to enhancing the carrier's efficiency and realizing the strategic potential of its commercial franchise, RG may one day resume its proud position as a leading carrier for the region.

I totally subscribe to the above position.

Quoting Virgin747 (Reply 37):
Were talking about an Airline that asked its employees to make every consession possible, and to top it off create a program to make Air Canada planes cost effective.

That's why Varig needs AC management...  Smile

Rgs,
 
VonRichtofen
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 4:38 pm

Quoting Virgin747 (Reply 37):
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 create a program to make Air Canada planes cost effective. After all that work, the folks at the top are going to run off and try to take part in another airline

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 back doesn't even keep up with inflation....

Kris
 
MCOflyer
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 10:33 pm

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
Never be afraid to stand up for who you are.
 
sebring
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 10:34 pm

Quoting Virgin747 (Reply 37):
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 create a program to make Air Canada planes cost effective).

I know this is gonna sound opposite of what I just said... but South America seems like a good market... But i'm sure Air Canada/United could have done it another way.

AC's restructuring into ACE was made possible not only by employee concessions, but by concessions from lessors and other creditors, and by the infusion of new equity. Since ACE emerged from creditor protection in 2004, the airline has received over $1.25 billion in new equity. The combined concessions of creditors exceeded the concessions of employees. Since then, ACE has made money investing in US, so it's hardly fair to say that the employees are funding investments, though they have contributed to making them possible. It's also noteworthy that with the wage and benefit concessions made by employees of other North American airlines since AC's restructuring, ACE employees are still the highest paid in Canada and among the highest paid in North America, and they still have a fully intact pension which hardly any U.S. airline employees can boast. That's not to say that they didn't contribute to the company's restructuring, but they tend to sound a lot more hard done by than perhaps they should given the shape of the global airline industry today, or should I say, the ailing industry.
 
JAL
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 10:54 pm

A big waste of money! Why bother invest in a seriously money losing airline!
Work Hard But Play Harder
 
swissy
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RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 11:01 pm

Quoting JAL (Reply 42):
A big waste of money! Why bother invest in a seriously money losing airline!

To make money.................. RG will fit nicely within, the south American market is big..................

Cheers,
 
Brasuca
Topic Author
Posts: 684
Joined: Wed Mar 10, 2004 12:09 am

RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 11:15 pm

Quoting JAL (Reply 42):
A big waste of money! Why bother invest in a seriously money losing airline!

You suggest AC management team is incompetent? Maybe they have a lot to learn with you. Send them your CV.  Yeah sure
Varig, Varig, Varig
 
PDPsol
Posts: 1109
Joined: Fri Feb 20, 2004 5:09 am

RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 11:23 pm

Quoting JAL (Reply 42):
A big waste of money! Why bother invest in a seriously money losing airline!

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 potential investment in RG very, very carefully and has determined its return on an investment in the troubled carrier will yield a profit commensurate with the risk involved.

As I have mentioned before, RG's problems were always related to its nightmarish FRB corporate governance. New shareholders, determined to whip RG into an efficient, profit-generating operation should realize handsome returns on their investment.
 
SFORunner
Posts: 306
Joined: Fri Jul 30, 2004 4:23 am

RE: Air Canada Buying A Stake Of Varig

Fri Aug 25, 2006 11:51 pm

Quoting JAL (Reply 42):
A big waste of money! Why bother invest in a seriously money losing airline!

http://www.aircanada.com/acts/en/media051905.html

May 19, 2005

ACE Aviation Holdings today announced its intention to invest USD$75 million (approximately CAD$95) in the merged US Airways-America West carrier.

http://ir.flyjazz.ca/phoenix.zhtml?c...l-newsArticle&ID=879663&highlight=

July 7, 2006

Total net proceeds to date from the sale of US Airways shares amount to US$205.48 million, as compared to ACE's original investment of US$75 million in September 2005 for 5 million shares. As of July 7, ACE still holds 500,000 shares in US Airways with a market value of US$27.8 million based on the closing price on July 6, 2006.
 
Brasuca
Topic Author
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RE: Air Canada Buying A Stake Of Varig

Sat Aug 26, 2006 12:31 am

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.

http://www1.folha.uol.com.br/folha/dinheiro/ult91u110515.shtml (Portuguese only)
Varig, Varig, Varig
 
FLYACYYZ
Posts: 1820
Joined: Fri Jan 23, 2004 12:13 am

RE: Air Canada Buying A Stake Of Varig

Sat Aug 26, 2006 1:40 am

Quoting Virgin747 (Reply 37):
Does ACE expect its 10% to be run like Air Canada??(Paper wine boxes, removing maitanance access stairs in its 320 family).

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 320 were dead weight that were rarely used, and a fuel/weight saving initiative at the urging of the actual maintenance department.
Above and Beyond
 
FMAL
Posts: 469
Joined: Tue Jan 13, 2004 9:16 am

RE: Air Canada Buying A Stake Of Varig

Sat Aug 26, 2006 1:49 am

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 on Smiles in exchange for a 10% stake in the airline.

In the long run, this just might be one of the best deals AC ever made!