VARIGREVEALS that it is back in profit, following the success of the sweeping restructuring programme launched by the Brazilian carrier in March 1994.
President Rubel Thomas reports that Varig recorded a profit of $180 million in the first ten months of 1994, turning round a loss of $225 million posted in 1993. He adds that the airline showed, a $62 million profit for October alone.
The better performance was helped by measures, to strengthen the Brazilian currency, which has risen sharply against the dollar since mid-year and an increase in demand for domestic flights, with load factors averaging nearly 77%.
Under the cost-cutting programme, Varig has reduced its fleet from 85 aircraft to 76, restructured its long-term debt of $1.2 billion and shed one-quarter of its workforce, to leave 21,500. Ruben expects the measures to save $225 million in 1995.
The airline plans to sell its hotel chain and publicity agent for $18 million but will hold on to regional-airline subsidiary RioSul and Sata, which provides airport ground-handling services.
Source: Flight International
