Air Canada parent ACE not commenting on troubled Brazilian carrier Varig purchase report

Washington DC
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Air Canada parent company ACE Aviation is not commenting on a report that it is set to acquire 10% of the newly reformed Varig.

In an article yesterday, Brazilian daily newspaper O Estado de São Paulo, citing unnamed sources, says ACE is set to announce the purchase on August 25 after the deal to reform Varig under new ownership is approved by the country’s regulators.

“ACE looks at a number of investment opportunities on an ongoing basis but we do not comment on specifics,” says an ACE spokeswoman.

In its detailed exclusive, Estadao says ACE intends to transfer some of its Boeing 767s to the Brazilian airline. Air Canada will also give Varig at least six of the delivery slots it holds with Embraer, a move that indicates that Varig as expected will order the manufacturer’s E-195 aircraft as part of its fleet upgrade.

Embraer will not comment on the ACE slots or the possible deal with Varig.

Under Brazilian law, foreign investors cannot hold more than 20% of a domestic airline.

On August 11, ACE confirmed that it is planning to sell a minority stake in its Air Canada unit.

Varig was not immediately available for comment.