I hear we have a repoed Varig 777 sans engines sitting on a hard stand at JFK, any idea whats going to happen to it?
Varig paperweight?
- Thread starter LGA Fleet Service
- Start date
Varig has several GE powered 777, some are new and some are early British Airways examples that were limited in BA's service since they are 777A's with 77,000 pound thrust engines, not the later 90,000 pounds most airlines now have. AA's are all Rolls powered beauties, new from Seattle to AA. AA has about 50 777-200ER's.
Here is whats going with VARIG>>>
From bloomberg news line:
http://www.bloomberg.com/apps/news?pid=100...r=latin_america
American, TAM Stand to Gain Most From Varig Collapse (Update1)
June 22 (Bloomberg) -- AMR Corp.'s American Airlines, the world's largest airline, and TAM SA, Brazil's biggest domestic carrier, are the companies poised to benefit most from a shutdown of Brazil's bankrupt carrier Varig, Merrill Lynch said in a report today.
Sao Paulo-based TAM is in a better position to take over Varig's international routes than its local competitor Gol Linhas Aereas SA, the report said. American Airlines, which had than $3 billion of revenue in Latin America last year, would gain the most among U.S. carriers in Brazil, the report said. Varig was Brazil's biggest carrier abroad until last month.
``TAM has more capacity to absorb international routes than Gol because it is has been operating the routes longer and has more traditions in this business,'' Alexandre Povoa, who helps manage 450 million reais ($201 million) of stocks and bonds at Modal Asset Management in Rio de Janeiro, said in a telephone interview.
Varig, which has operated under bankruptcy protection for more than a year, is closer to liquidation after an employee-led group trying to buy the airline said it won't be able to make a court-mandated $75 million payment tomorrow, Selma Balbino, president of Brazil's ground workers union, said. A U.S. bankruptcy judge this week ruled Varig must ground most of its fleet tomorrow unless aircraft leasing companies get the money.
From bloomberg news line:
http://www.bloomberg.com/apps/news?pid=100...r=latin_america
American, TAM Stand to Gain Most From Varig Collapse (Update1)
June 22 (Bloomberg) -- AMR Corp.'s American Airlines, the world's largest airline, and TAM SA, Brazil's biggest domestic carrier, are the companies poised to benefit most from a shutdown of Brazil's bankrupt carrier Varig, Merrill Lynch said in a report today.
Sao Paulo-based TAM is in a better position to take over Varig's international routes than its local competitor Gol Linhas Aereas SA, the report said. American Airlines, which had than $3 billion of revenue in Latin America last year, would gain the most among U.S. carriers in Brazil, the report said. Varig was Brazil's biggest carrier abroad until last month.
``TAM has more capacity to absorb international routes than Gol because it is has been operating the routes longer and has more traditions in this business,'' Alexandre Povoa, who helps manage 450 million reais ($201 million) of stocks and bonds at Modal Asset Management in Rio de Janeiro, said in a telephone interview.
Varig, which has operated under bankruptcy protection for more than a year, is closer to liquidation after an employee-led group trying to buy the airline said it won't be able to make a court-mandated $75 million payment tomorrow, Selma Balbino, president of Brazil's ground workers union, said. A U.S. bankruptcy judge this week ruled Varig must ground most of its fleet tomorrow unless aircraft leasing companies get the money.
Hopeful
Veteran
- Dec 21, 2002
- 5,998
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The aircraft actually is the property of a leasing company who repoed the a/c from Varig. A couple of months ago, this aircraft landed, and a bank (not sure which bank). that owned the right hand engine seized the aircraft so the engine could be removed and given back to the them. This aircraft sat for over a month at United's hangar with no right engine. The leasing company contacted AA at JFK to bring the aircraft to Hangar 10 for storage. Currently they are trying to get another engine either by lease or purchase.
AA is picking up some nice $$$$$ for storing this aicraft and having mechanics perform the required long term storage procedures.
I dont think AA gains anything, from the collapse of Varig. Unless they are allowed additional flights. We are full up on passengers and cargo. Plus I dont know what Varig was operating to the US, but here in Miami there was only s 767 that sat out on the ramp during the day
The reason you only saw a 767 sitting on the ramp was because Varig had redeyes and daylights to MIA, so the Sao Paulo flights didn't park on the ramp. Varig was operating two daily MIA-GRU, a redeye and daylight, flights with 772s and seasonal (June-August; December-February) 3x weekly MIA-GIG flights with a 763. So 17 flights a week. Varig slashed their long haul network earlier this week. It is now down to only four cities - Miami, Frankfurt, London, and Caracas. One daily to each from Sao Paulo, plus a daily Frankfurt-Rio de Janeiro flight.
Varig's situation is unfortunate. TAM really took advantage of it when they started going long-haul. TAM is now one of MIA's biggest international airlines. This summer they fly non-stop from MIA to six cities - Sao Paulo, Salvador, Manaus, Natal, Recife, and Fortaleza.
If the crisis gets serious, Brazil would likely allow AA (and others) to fly extra frequencies on an seperate bilatteral. Last year Brazilian aviation authorities allowed AA an additional five weekly flights to GIG.
lpbrian
Veteran
- Mar 7, 2004
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I think AA should grab LAX-GRU if it could. It would make a nice tag to LAX-NRT. Thats how VARIG operated it last I heard, with an MD-11. TAM can't do it because all it has are A330's. Unlike what FA Mikey says , it would benefit AA because capacity is removed, thus driving up airfares. AA can also replace 767's with 777's to Brazil if needed, as there is surplus 777 capacity now. Might as well enjoy it now because I feel US-Brazil will be open skies soon. BTW does anyone know if VARIG has fifth-freedom rights on LAX-NRT?
Varig's LAX route bleeds money and they just flew it for prestige. The market is low-yielding and not that large. Varig used to make money on Brazil-Japan traffic that they took through LAX (and yes, they had 5th freedom), but after the US government (quite stupidly) decided that you need a Visa, even if you are just connecting, the flights quickly ended because most Brazil-Asia traffic now goes through Europe.
I wonder how much revenue the suspension of the TWOV program as cost us? We used to have tons of TWOVS out of Mexico who were going to Canada and Europe. I guess they all fly direct now if they have no VISA for the US.
It has cost AMR, but not to the point where it is drastic. Though the DFW LatAm operations have felt the brunt of the pain from it. MIA/JFK ops rely on O&D as the primary source of profits.
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