JACKSON FLORES / RIO DE JANEIRO
Local partners Nordeste and Rio Sul will take over some of flag carrier's domestic routes
Varig is set to implement further fleet cuts beyond last month's removal of eight aircraft as the value of the Brazilian real continues to fall against the dollar and euro and the airline's cashflow difficulties worsen.
Last month, seven of the Brazilian flag carrier's Boeing 737-300/700s and one Boeing MD-11 were returned to lessors, and a further 11 737s (seven -300s and four -400s) are due to go back to GE Capital Aviation Services (GECAS) this month as Varig tries to stem its financial haemorrhaging until a capitalisation plan is completed. Varig has negotiated with GECAS to retain six 767-200ER/300ERs and three MD-11s until 2004.
This latest development has pre-empted a planned operational merger between Varig and the other two carriers owned by Varig's parent FRBPar - Nordeste and Rio Sul. Both airlines will fill the void left by capacity cuts on Varig's domestic routes.
According to Varig planning director Alberto Fajerman, the merger of Rio Sul's and Nordeste's route network into Varig's will "break fleet rigidity between the three airlines. We are going to optimise aircraft utilisation." Rio Sul is set to receive three 737-300s and an additional 737-700, and will absorb many of Varig's southern domestic routes, while Nordeste will fly much of Varig's north and north-western domestic network.
Varig will undertake a major reshuffle of its fleet in a bid to increase load factors to 70% this quarter, up from 58% last month. Many domestic and international routes will undergo reductions in frequency or will be suspended from mid-August. Rio Sul will replace Varig 737s on flights to Córdoba in Argentina with Embraer ERJ-145s in response to the 30% load factor fall experienced since January.
Source: Flight International
