Brian Homewood/RIO DE JANEIRO
TRANSBRASIL HAS swung back into the black for the first time in eight years, helped by Brazilian Government reforms designed to stabilise the country's volatile economy.
Brazilian flag carrier Varig has already reported a profit for 1994, and expects to make further gains as its restructuring plan continues over the next couple of years.
Transbrasil beat expectations to produce a net profit of $45.6 million for 1994, its first since 1986. The airline's founding president, Omar Fontana, links the improvement directly to the Brazilian Government's "Real Plan" economic reforms, implemented in mid-year.
After notching up an operating loss of $36 million in the first six months of the year, Transbrazil turned round to end the year with an operating profit of more than $34 million.
Sales grew by nearly one-third, to $562 million. The target for 1995 is for sales of $720-740 million with profits of $80-100 million.
Fontana says that demand has increased dramatically since implementation of the Real Plan, which introduced a new currency and reduced monthly inflation from 30% to 2%. Currency stability allowed Transbrasil to reduce financial expenses by more than 60%, adds Fontana, whose family owns 78% of the airline.
Transbrasil, which leases 22 of its 25 aircraft, also saved money by renegotiating lease terms, bringing the average monthly rate down, from $5.77 million to $4.9 million.
Varig is also targeting major performance improvements this year, having turned in a net profit of $170 million for 1994. The carrier's new president, Carlos Willy Engels, says that Varig saved $90 million in 1994 through its restructuring programme and estimates further savings of $160 million in 1995 and $50 million in 1996.
Engels says that the group intends to shed another 1,500 jobs this year, mainly through non-replacement of staff and by contracting out catering and security services. In 1994, the workforce shrank by 3,600, to end 1994 at 21,100
Restructuring has also involved renegotiating aircraft leases, returning eight Boeing 747s, closing foreign offices and ending services to Canada, French Guiana and Nigeria. Varig, which already has code sharing agreements with Delta, Japan Airlines, Lacsa, Lufthansa and SAS is looking for further partnerships.
Engels has replaced Rubel Thomas, who initiated the reforms, and has retired after five years in charge of the airline.
Source: Flight International
