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Brazil's Infraero, the state-run airport administration agency, reports that yesterday morning alone, June 28, a total of 73 Varig flights were cancelled, which works out to 78% of the 94 scheduled flights for the period.
Today the Rio de Janeiro business court judge, Luiz Roberto Ayoub, is scheduled to proceed with further hearings on the proposal by Volo Brasil to buy Varig. Volo is an investment group of Brazilian businessmen, the American investment fund, Matlin Patterson, and investors from Macau. Meanwhile, the judge at a New York bankruptcy court has extended protection against arrest of Varig aircraft until mid-July. And in Rio, the Varig worker union continues to oppose the sale to Volo by filing suits in court questioning the composition of the investment group, based on information that the foreign investors in it own more than 20% of the firm, which is illegal under Brazilian legislation. There are three possible endings for Varig which has now been in a sort of Chapter 11 receivership since June 2005. The purchase by Volo for US$ 500 million could be approved. The courts could order another auction. Varig could be declared bankrupt. ABr
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