Brazil's VASP has ceased intercontinental operations after a court order granting the repossession of its four McDonnell Douglas MD-11s by Golden Gate Leasing, owed $41 million in lease instalments. VASP is consequently suspending flights to Europe and the USA - its last long-haul services - from 15 May.
With debts of $1.82 billion, including $1.21 billion owed to government agencies, VASP averted suspension in February by resuming weekly payments on $233 million owed to Infraero, the Brazilian airport administration, but was pursued by other creditors. Social security debts of $188 million and $57 million in welfare debts have led to staff unrest.
VASP moved to lower costs by cutting weaker routes, reducing staff and down-sizing its fleet, and tried to boost revenues by slashing fares on the Rio-São Paulo shuttle by 50%, but with little success.
Source: Flight International
