Varig's chief executive Fernando Pinto has been dismissed after the airline reported a $94 million loss for the 1999 fiscal year. Ozires Silva, a former Embraer boss and Brazilian minister of planning, has succeeded him.
Pinto's departure follows the failure of his attempts to steer flag carrier Varig through the difficulties the Brazilian airline industry has experienced over the past 12 months following the devaluation of the Real.
The carrier was hard hit by the disbursement of around $44 million as amortisation on foreign exchange operations, while the re-admission of 700 ex-Varig employees cost $34 million.
Silva, 69, was a voting member of Varig's administrative council and financial controller of two Varig-owned regional carriers, Rio Sul and Nordeste. The new chief executive says one of his first tasks will be to begin a fleet rationalisation programme, which is expected to see the airline move ahead with plans to replace Boeing MD-11s with 777s.
Conceding that Varig's operational expenses are too high, Silva says: "We want to better employ our assets, increase growth in specific areas such as tourism and, for example, perform packaged charter flights."
Silva dismisses the possibility of mergers with other airlines in the region, or any financial association with foreign carriers, but says Varig would be interested in taking over routes to Europe and the USA recently abandoned by VASP, the country's second largest carrier. Varig is about to begin services between São Paulo and Munich.
With Varig still in debt and VASP's future in the balance, Brazil's third and fourth largest airlines, TAM and Transbrasil, have concluded a codesharing agreement that is being viewed by some as the first step towards a merger. The deal will initially encompass the 600 daily domestic flights offered by the two airlines.
Source: Flight International
