Brazilian airline Transbrasil suspended operations on 3 December after it was unable to reach an agreement with fuel suppliers over unpaid bills. The withdrawal of fuel left the airline's five Boeing 737-300s and the four Embraer EMB-120s belonging to regional affiliate Interbrasil still grounded as Flight International went to press.
The airline says it will resume services once it has settled its fuel debts. Nevertheless, some market analysts are sceptical that Transbrasil will be able to resolve the problem after it committed itself to pay staff wages that have gone unpaid since October.
George Ermakoff, president of Brazil's National Airline Syndicate warned the financial problems were not just related to Tranbrasil: "The haemorrhage being experienced by Transbrasil affects other carriers and they are all going down the same road."
Transbrasil is trying to obtain cash to settle its debts and weather the crisis by seeking repayment of $142 million in government service taxes illegally levied between 1988 and 1994. However, local analysts do not pin any hopes on such a solution as the government's position is that Transbrasil passengers and not the airline itself should benefit from the payments.
The regional operator's financial woes date back to the 1999 devaluation of the Brazilian real. Its problems were further aggravated by rising fuel costs. Mounting domestic and overseas debts, the latter attributable to leasing arrangements on its fleet, forced the Brazilian airline to pare its flight and ground staff, trim its fleet and surrender its international route network. Its share of the domestic market has also collapsed.
Source: Flight International
