JACKSON FLORES / RIO DE JANEIRO
Varig is focusing its efforts on improving its finances, as the proposed merger with TAM and the expected cash injection by Brazil's development bank still remain to be finalised.
"The merger model with TAM was based on the snapshot image of a market that has changed considerably since the proposal was first outlined," says Luiz Martins, one of Varig's vice-presidents. The two airlines' different company cultures, fleet composition and infrastructure could be major obstacles, says Martins, adding that FRBPar, Varig's holding company, wants a larger slice of the merged airline than the planned 5%.
The Brazilian flag carrier has recently posted its best financial results for the past seven years, and is setting its sights on achieving better performance in 2004 and regaining lost ground. Network and fleet growth is under way - including the resumption of services to Africa.
Varig's widebody fleet expansion is partially offsetting reductions implemented over the past two years. Three ex-Swiss International Airlines Boeing MD-11s have been added, and two more Boeing 777-200ERs are expected to be leased soon at monthly rentals that are almost half those of its two 777s. The lease of an undisclosed number of 757-200s is being studied for its longer domestic and South American services, while the lease of four 737-300s is being negotiated to partially recover domestic frequencies and routes surrendered in the past two years.
Source: Flight International
