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Thursday Auction Set for Varig SaleJuly 19, 2006 By: Susan Young Travel Agent
Mired in $3.2 billion in debt, Brazilian airline Varig grounded 86 of 139 flights scheduled for next Tuesday as an auction looms for this week. Internationally, only Tuesday's flights to Frankfurt, Miami and London have any chance of operating, but even that's not sure at this point. The latest flight cancellations came just a day after Varig's creditors rejected the airline's latest restructuring plan. The judge overseeing the airline's bankruptcy proceedings has ordered a sale to avert a potential collapse. Much of Varig's fleet is set to be returned to leasing companies by July 21. Brazil's National Agency of Civil Aviation is expected to extend an emergency plan under which other airlines in Brazil and abroad have been endorsing Varig tickets. An auction last month to sell Varig failed after a group of Varig employees, the only bidding group, failed to make a required $75 million down payment.