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Slimmer Vasp looks to better 2004

JACKSON FLORES / RIO DE JANEIRO

Brazilian airline Vasp is predicting a turnaround next year after reducing its first-half loss to $2.9 million, compared with a $59.4 million loss for the same period of 2002.

The airline believes it will end its 2003 financial year with gross revenues of $381 million, and has initiated a major fleet-renewal effort. It is aiming to wrest back its position as Brazil's third largest carrier, which it surrendered earlier this year to low- fare airline Gol Transportes Aéreos.

After resizing around a 26-strong passenger aircraft fleet, the airline aims to double in size over the next three years. Vasp operates 19 ageing Boeing 737-200/200Advs - some of which are over 30 years old - that it aims to replace in a $220 million renewal plan, recently announced by chief executive Wagner Canhedo. Three Airbus A300B2s and four 737-300s are also operated.

Vasp believes it will conclude this year's financial arrangements with domestic and foreign entities to initiate the long-delayed fleet renewal. Canhedo intends to negotiate lease-finance deals for 10 Airbus A320s or 737-700s during 2004.

The airline is reportedly acquiring six ex-Olympic Airways 737-200Advs to replace older 737-200s.

Local observers believe the recently announced postponement of deliveries of Embraer 170/195s to Swiss International Airlines could enable Vasp to negotiate a deal with the Brazilian state-owned development bank BNDES to lease nine Embraer 170s next year.

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