Varig's tap er kuttet kraftig...

[LN-AFG]

Tapet er senket fra $693.9 mill. til bare $33.5 mill. Nå er det bare å stable United, US Airways og SAS på beina så går det vel i pluss for hele Star Alliance.

Airwise.com

Varig Reduces Losses In 2004
April 7, 2005

Brazil's flagship airline Varig said on Thursday it slashed its net loss to just BRR87 million reais (USD$33.5 million) last year from BRR1.8 billion (USD$693.9 million) in 2003 in its best result since 1999.

Net revenue from flights rose to BRR8.2 billion (USD$3.16 billion) from BRR7.5 billion (USD$2.89 billion) as the number of air travelers in Brazil grew 11.9 percent, Varig said in a statement.

In the fourth quarter alone, Varig swung to a net profit of nearly BRR218 million (USD$84 million) from a year-earlier loss of BRR1.3 billion (USD$501 million), said Varig Investor Relations Director Ricardo Bullara.

He added that the company was in a better shape and ready to receive capital injection "in any form."

Despite the improvement, Varig's 2004 bottom-line was much worse than that of its rivals; TAM and GOL both posted record profits for the year. Varig's market share as of year-end stood at 31 percent.

"A better operating result had been expected, but everything is eaten up by financial costs due to high indebtedness," said Marcelo Ribeiro, an analyst with Pentagono brokerage. He said the end of a code-sharing agreement with TAM in May may reduce Varig revenue.

Bullara said that this year, Varig would have to repay BRR1 billion (USD$385.5 million) in debt and on aircraft leases. He said the end of the TAM deal would mean smaller reve

nues "but nothing that could seriously affect the company".

The Brazilian government has been studying ways in which it could rescue Varig, which has massive debts and high costs.

Government officials have said the solution could be a temporary nationalization of the company. Varig's debt -- BRR5.7 billion (USD$2.2 billion) at the end of 2004 -- would be converted into equity for creditors, then the airline would be put up for sale at a public auction.

The government is Varig's main creditor, holding 63 percent of the debt. Varig claims the government, in its turn, owes it BRR3 billion (USD$1.16 billion), an issue that is being examined in court.

Portugal's Grupo Pestana tourism company is seeking to buy a 20 percent stake in Varig through its charter airline Euro Atlantic. Under Brazilian law, foreign companies can acquire a maximum 20 percent stake in the airline sector.

(Reuters)