mdaddy
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Varig Retreats From MIA

Tue Dec 05, 2006 3:08 am

Varig submitted notice to MIA that they will terminate official occupancy of leased property at the airport. This follows continued flight inactivity and one can presume closes the book on this airline in this city.
 
AA787823
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 3:10 am

Great news for AA! More traffic to us! Bad news for non revs.  Sad
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PPVRA
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 3:15 am

Quoting Mdaddy (Thread starter):
This follows continued flight inactivity and one can presume closes the book on this airline in this city.

Why close the book in Miami? Maybe they are just cutting costs.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
PPVRA
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 3:18 am

Quoting AA787823 (Reply 1):
Bad news for non revs.

Bad news for every customer. US-Brazil fares have been extremely high, and thats going back since before the high season too.

I hope they get back to MIA asap so I don't have to pay 150% or so of the average fare before RG suspended MIA.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
mdaddy
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 3:20 am

Quoting PPVRA (Reply 2):
Why close the book in Miami? Maybe they are just cutting costs.

Yep. I would say that they will definitely lower their costs by not flying. Expensive business these days!!
 
LatinPlane
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 3:31 am

From what I understand, they have been closing down various stations of their past international network for about two weeks now. Asuncion, Lima, and Montevideo's sales offices and airport personel were given termination news last week.

I wonder if this means what rumors have been saying lately that the RG name will cease to exist and a new brand will be created.

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United_fan
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 3:40 am

Maybe this will signal the return of UA heavies to MIA,now that they have that new Star terminal. If RG leaves,this would leave only AA & Tam.
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rwsea
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 3:47 am

Quoting United_fan (Reply 6):
Maybe this will signal the return of UA heavies to MIA,now that they have that new Star terminal. If RG leaves,this would leave only AA & Tam.

Would be nice, but I doubt UA would be willing to make that sort of investment in terms of feed and expanded operations. Plus, they're very short on long-haul aircraft.
 
MAH4546
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 4:22 am

This does not close the book on anything. Closing the station is a necessary step before they can re open it under the new company. They will be back.
a.
 
2travel2know
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 4:35 am

So it's not like they're to move to FLL?
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FMAL
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 4:41 am

Varig is a traditional and once profitable route for Varig. I'm sure they'll be back.
 
MAH4546
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 4:42 am

Quoting 2travel2know (Reply 9):
So it's not like they're to move to FLL?

Never. There is absolutely no market for FLL-GRU, I don't get why people think there is. There simply is not.

Varig will be back to Miami, Madrid, and London when they are ready, and others will follow. Varig is not going to ignore the single largest long-haul market from Sao Paulo.
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PDPsol
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 4:54 am

What, exactly, is going on at RG? These are the facts as I understand them:

- VarigLOG, which is 20%-owned by US private investment firm, MatlinPatterson, acquired RG's airline assets in an auction last July. I believe VarigLOG paid ~USD 25 million for the assets as well as a commitment to invest ~USD 500 million in RG.

- This auction was the first-ever bankruptcy asset sale auction in Brazil under its new federal bankruptcy protection law. In the U.S., these auctions are known as "363 asset sales", referring to the provision of the federal banckruptcy code governming such asset sales.

- VarigLOG was the ONLY entity to present a bid for the assets in the auction, despite the fact numerous other carriers expressed some interest, including AC and AV's owner, Synergy SA.

- As VarigLOG only acquired RG operational assets, all of RG's existing liabilities remained with the bankrupt estate [now controlled by creditors??], as well as RG's real estate, RG's large legal claim against the federal government for losses associated with fixed airfares dating several years and one single operational route to Brasil's northeast region.

- VarigLOG's RG now operates 3 M11's and 12 733's to domestic destinations and to CCS, BOG, EZE and FRA from GRU.

However, I read an article in ATW stating Joao Luiz Bernes de Souza, VarigLOG's CEO, will change the RG's name to "Nordeste". I thought "Nordeste" was the name of the carrier owned by the bankruptcy estate which operates a single route GIG-Northeast Brasil.

- Has VarigLOG's ownership of RG's assets been authorized by the federal bankruptcy court, Brasil's aviation authorities, as well as the relevant state governments?

- Does RG hold a valid certificate to operate all its flights?

- Will RG change its operating name to "Nordeste"?

- What, exactly, is going on?
 
B752OS
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 6:05 am

Isn't this a great victory, I would call it that, for AA and their MIA base? As the major Latin gateway in this country, a major competitor for AA on flights to Brazil is gone. Does this mean we could see some extra 763 service down to GIG and GRU?
 
stirling
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 6:12 am

Quoting FMAL (Reply 10):
Varig is a traditional and once profitable route for Varig

??

What about TAM?

[Edited 2006-12-04 22:13:45]
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MAH4546
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 6:16 am

Quoting B752OS (Reply 13):
Isn't this a great victory, I would call it that, for AA and their MIA base? As the major Latin gateway in this country, a major competitor for AA on flights to Brazil is gone. Does this mean we could see some extra 763 service down to GIG and GRU?

It is not a "victory" at all because Varig will be back to Miami, along with Madrid and London, most likely by mid-2007.

AA is heavily increasing service between Miami and Brazil this winter, however, and will operate up to six daily flights - four to Sao Paulo and two to Rio de Janeiro. TAM next year will offer four daily flights - to Manaus, Rio de Janeiro, Salvador, and Sao Paulo.
a.
 
mdaddy
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 6:38 am

Quoting Mah4546 (Reply 8):
This does not close the book on anything. Closing the station is a necessary step before they can re open it under the new company. They will be back.

That's analogous to saying that BWIA will be back. Actually, BWIA's replacement is more representative of the caribbean airline that existed than the successor to Varig since the "new" Varig will have jettisoned the essence and debt and (i bet) the name and.... I'm wondering what happens to the international route authorities; i.e. how long they can remain dormant ...is that a factor in their future activity etc?
 
MAH4546
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 6:43 am

Quoting Mdaddy (Reply 16):
That's analogous to saying that BWIA will be back. Actually, BWIA's replacement is more representative of the caribbean airline that existed than the successor to Varig since the "new" Varig will have jettisoned the essence and debt and (i bet) the name and.... I'm wondering what happens to the international route authorities; i.e. how long they can remain dormant ...is that a factor in their future activity etc?

Well, yes, it is analogous to saying BWIA will be back, although the "new" Varig will likely keep the name (although there has been the talk of the name changing to Nordeste, I give it a 50/50 shot). The US-Brazil air treaty allows Brazilian airlines 104 weekly flights to the US. Since they are far from using those all up, Varig easily gets to keep it's Miami, New York City, and Los Angeles route authorities, as US-Brazil route authorities can be infinitely dormant as long as nobody else asks for them because there are no remaining free frequencies.
a.
 
RICARIZA
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 7:06 am

Quoting MAH4546 (Reply 11):
Never. There is absolutely no market for FLL-GRU, I don't get why people think there is. There simply is not.

Well maybe because the biggest concentrations of Brazilians in the United States are in Boston and Pompano Beach. Pompano Beach is closer to FLL than to MIA and you can also find many low cost flights to FLL from Boston.
I miss ACES, I am proud of AVIANCA & I am loyal to AMERICAN
 
MAH4546
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 7:14 am

Quoting RICARIZA (Reply 18):

Well maybe because the biggest concentrations of Brazilians in the United States are in Boston and Pompano Beach. Pompano Beach is closer to FLL than to MIA and you can also find many low cost flights to FLL from Boston.

That doesn't change the fact that business travelers, not Brazilians, are filling these flights. That is why Boston has no non-stop flights to Brazil, and probably won't for a long time. And, none the less, there is a very large concentration of Brazilians in midtown Miami Beach and Brickell Avenue.
a.
 
panam330
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 7:14 am

Quoting RICARIZA (Reply 18):
Quoting MAH4546 (Reply 11):Never. There is absolutely no market for FLL-GRU, I don't get why people think there is. There simply is not.
Well maybe because the biggest concentrations of Brazilians in the United States are in Boston and Pompano Beach. Pompano Beach is closer to FLL than to MIA and you can also find many low cost flights to FLL from Boston.

What the hell does the FLL-BOS market have to do with the [lack of] FLL-GRU market?
 
MAH4546
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 7:20 am

Quoting PanAm330 (Reply 20):

What the hell does the FLL-BOS market have to do with the [lack of] FLL-GRU market?

Not much. Although AA carriers approximately 100-120 BOS-GRU/GIG passengers a day via Miami. They sure aren't going to be interlining at FLL.
a.
 
2travel2know
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 7:24 am

Quoting MAH4546 (Reply 15):
AA is heavily increasing service between Miami and Brazil this winter, however, and will operate up to six daily flights - four to Sao Paulo and two to Rio de Janeiro. TAM next year will offer four daily flights - to Manaus, Rio de Janeiro, Salvador, and Sao Paulo.

JJ flights have AA codeshare and AA flights have JJ codeshare? Or at least AA passengers get AAdvantage miles when flying JJ? That seems to me that the MIA-Brazil market is dominated by AA-JJ, which can't be considered competitors in that route but "partners".

Quoting RICARIZA (Reply 18):
Well maybe because the biggest concentrations of Brazilians in the United States are in Boston and Pompano Beach. Pompano Beach is closer to FLL than to MIA and you can also find many low cost flights to FLL from Boston.

FLL isn't as wellknown airport for most Brazilians as MIA. IMHO, if AA and JJ are to takeover the MIA-Brazil market and do whatever they please with it, it could be advisable fro RG to move to FLL and offer a somewhat different product than AA/JJ do. I've to disagree with MAH4546, GRU-FLL could work, what I'm afraid is that few premium-fare paying passengers are to choose to travel between FLL and GRU compared to between MIA and GRU.
I don't work for COPA Airlines!
 
MAH4546
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 7:27 am

Quoting 2travel2know (Reply 22):
JJ flights have AA codeshare and AA flights have JJ codeshare? Or at least AA passengers get AAdvantage miles when flying JJ? That seems to me that the MIA-Brazil market is dominated by AA-JJ, which can't be considered competitors in that route but "partners".

They do not codeshare entirely. AA's code is on JJ's redeye, and JJ's code is on two of AA's redeyes to GRU. They only codeshare on MIA-GRU. No codesharing to GIG, MAO, or SSA.

Quoting 2travel2know (Reply 22):
I've to disagree with MAH4546, GRU-FLL could work, what I'm afraid is that few premium-fare paying passengers are to choose to travel between FLL and GRU compared to between MIA and GRU.

You just explained why FLL-GRU will never work: there is no business traffic. It won't work. Will it fill? Sure, during peak days. Will it make money? Nope.
a.
 
dellatorre
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 8:56 am

Quoting MAH4546 (Reply 19):
That doesn't change the fact that business travelers, not Brazilians, are filling these flights. That is why Boston has no non-stop flights to Brazil, and probably won't for a long time. And, none the less, there is a very large concentration of Brazilians in midtown Miami Beach and Brickell Avenue.

Brazilians are pretty much everywhere in Southern Florida.
 
PRAirbus
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 11:48 am

RG has lost customers, market share and unfortunately closed its USA chapter w/really bad memories (unreliable service) for passengers. They will not be able to succeed and capture market share for a while since other carriers such as AA, TAM, etc. already dominate RG's former territory. It's a shame...I predict OceanAir might open routes to USA before RG returns.
 
RICARIZA
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 12:53 pm

Quoting MAH4546 (Reply 19):
there is a very large concentration of Brazilians in midtown Miami Beach and Brickell Avenue



Quoting Dellatorre (Reply 24):
Brazilians are pretty much everywhere in Southern Florida.

Yes, but from the total Brazilians in South Florida, about 40% are in the Pompano Beach area. This is not perception as it happens with the Brickell/Miami Beach communities, these are statistics; (I work in Marketing for Hispanics/Latins in the US.)
I miss ACES, I am proud of AVIANCA & I am loyal to AMERICAN
 
hardiwv
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 6:01 pm

Quoting Pdpsol (Reply 12):
- Has VarigLOG's ownership of RG's assets been authorized by the federal bankruptcy court, Brasil's aviation authorities, as well as the relevant state governments?

Yes.

Quoting Pdpsol (Reply 12):
- Does RG hold a valid certificate to operate all its flights?

No. CHETA is about to be awarded any time soon, some sources mention this week.

Quoting Pdpsol (Reply 12):
- Will RG change its operating name to "Nordeste"?

No. This is not true and RG President already gave news conference clarifying the misunderstanding.

Quoting Pdpsol (Reply 12):
- What, exactly, is going on?

Currently there are strong (unconfirmed) information that RG is about to received 2 x B747 or/and 2 x A343. I would classify this information as rumour, although some sources are reliable.

The A343s are expected to be ex-VS (G-VAEL) in Gatwick and another A343 ex-BWIA and VS (9Y-JIL, G-VSKY) in Bristol. Rumours also point to 2 ex-LH B747s.

Rgs,
 
JJMNGR
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 8:05 pm

Quoting FMAL (Reply 10):
Varig is a traditional and once profitable route for Varig.

The only profitable route VARIG has was the shuttle service CGH/SDU/CGH as per their audit report at the time of the auction.
 
AJMIA
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RE: Varig Retreats From MIA

Tue Dec 05, 2006 8:45 pm

Quoting MAH4546 (Reply 15):
AA is heavily increasing service between Miami and Brazil this winter, however, and will operate up to six daily flights - four to Sao Paulo and two to Rio de Janeiro. TAM next year will offer four daily flights - to Manaus, Rio de Janeiro, Salvador, and Sao Paulo.

Do you think AA's fourth daily flight will be extended indefinately if RG has no immediate plans to return?

AJMIA
Lady it's a jet... not a kite.
 
FMAL
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RE: Varig Retreats From MIA

Wed Dec 06, 2006 12:03 am

Quoting JJMNGR (Reply 28):
The only profitable route VARIG has was the shuttle service CGH/SDU/CGH as per their audit report at the time of the auction.

That's why I said "once".

Quoting Stirling (Reply 14):
??

What about TAM?

Don't really understand your post, but it was my mistake. I meant MIA was once a profitable and always traditional route for Varig.
 
incitatus
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RE: Varig Retreats From MIA

Wed Dec 06, 2006 12:18 am

Quoting MAH4546 (Reply 23):
You just explained why FLL-GRU will never work: there is no business traffic. It won't work. Will it fill? Sure, during peak days. Will it make money? Nope.

When it comes to local traffic getting on a flight to Sao Paulo, the locations of FLL and MIA are pretty much indifferent. There is no business traffic in FLL-GRU because there are no flights on FLL-GRU! FLL-GRU will obviously not work for American, but I can perfectly see a Brazilian carrier like Gol seriously considering service to FLL. And then they may even make an agreement with Delta+USAir or Jblue to get passengers out to other US destinations.
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hardiwv
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RE: Varig Retreats From MIA

Wed Dec 06, 2006 12:42 am

Quoting JJMNGR (Reply 28):
The only profitable route VARIG has was the shuttle service CGH/SDU/CGH as per their audit report at the time of the auction.

Please clarify. I had information that almost all RG routes were profitable, except for LIS and BOG. GRU-FRA and GIG-FRA were the two most profitable international routes, while CGH-SDU the most profitable system wide.

Quoting Incitatus (Reply 31):
but I can perfectly see a Brazilian carrier like Gol seriously considering service to FLL.

In my understanding GOL has a very strong corporate-business market and in this fashion I expect it to serve MIA instead of FLL.

Rgs,

Hardi @ LCY
 
incitatus
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RE: Varig Retreats From MIA

Wed Dec 06, 2006 1:05 am

Quoting Hardiwv (Reply 32):
In my understanding GOL has a very strong corporate-business market and in this fashion I expect it to serve MIA instead of FLL.

Hardi:

Even though a good chunk of business travelers works in downtown Miami, there are plenty of other pockets of offices in the area, including downtown Ft. Lauderdale and further north like in Boca. It is convenient to leave the office downtown Miami and head to MIA, but most travelers headed to southern South America leave late at night and do not go straight from the office to the airport. They go home first, and home is not usually in downtown. After 9 PM traffic on I-95 is somewhat light (that is, it moves) so the advantage of MIA for local business travelers is very small, if any. The reason why business travel is so stronger at MIA is because of the availability of longhaul flights and corporate contracts with American. For foreign carriers there is also better connectivity for cargo and passengers at MIA, so they end up preferring to serve MIA.

When I travel domestic in/out of the Miami area, I pick FLL or MIA based on timing and fare, and if all else the same, sometimes even the relative price of rental cars at each airport. In light traffic, that is, really off hours, the entire distance between FLL and MIA can be covered in 20-25 minutes - by car.
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JJMNGR
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RE: Varig Retreats From MIA

Wed Dec 06, 2006 8:22 am

Quoting Hardiwv (Reply 32):
Please clarify. I had information that almost all RG routes were profitable, except for LIS and BOG. GRU-FRA and GIG-FRA were the two most profitable international routes, while CGH-SDU the most profitable system wide.

Hardi, The only route where VARIG was profitable was CGH/SDU/CGH. This was a result of the audit made at theirs due to auction. TAM paid to have access to the books and get the information to participate or not and that was the information.
All other routes, they were losing money. Aircrafts full of pax does not mean profitability.
 
PPVRA
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RE: Varig Retreats From MIA

Wed Dec 06, 2006 9:12 am

JJMNGR,

How long of a period of time did that audit go over?
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
aircanada014
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RE: Varig Retreats From MIA

Wed Dec 06, 2006 11:02 am

Quoting AA787823 (Reply 1):
Great news for AA! More traffic to us!

So you think its great news for AA so does that mean you don't want competition? You are willing to pay for higher fares? U need more competitions if u want to fly cheap beside using pass.
 
LipeGIG
Posts: 5050
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RE: Varig Retreats From MIA

Wed Dec 06, 2006 12:12 pm

Guys, the one closing bases is the old-Varig. New RG management will not accept high salaries paid by old-Varig (higher than the market) and due to this they will probably hire new workers.

RG routes to FRA use to be profitable. During the last months, of course, Varig become in a very bad situation, issued tickets with higher discounts, lost cargo contracts, face an increase on FF tickets issuance and more no-shows, delays and else where which produced a loss on many major routes. Looking for their 2004/2005 reports, is clear that FRA use to be profitable. For sure considering the last months (with strong loss), FRA become a looser, but Tam keep with open eyes on FRA.

Quoting AJMIA (Reply 29):
Do you think AA's fourth daily flight will be extended indefinately if RG has no immediate plans to return?

No, it's just an additional frequency approved during the Brazilian summer. It could be repeated on IATA summer, and also AA2980 (GIG-MIA) because of the Pan American Games.

Felipe
New York + Rio de Janeiro = One of the best combinations !
 
JJMNGR
Posts: 924
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RE: Varig Retreats From MIA

Wed Dec 06, 2006 8:08 pm

Quoting PPVRA (Reply 35):
How long of a period of time did that audit go over?

Don´t know...I only know the result.

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