June 20, 2006 [LINK]
Varig, the leading international airline of Brazil, is in dire financial straits and over half of its planes are out of operation for want of maintenance. The private firm (actually, a non-profit foundation) declared bankruptcy a year ago and has asked for a government bailout, but the leftist government is not sympathetic. The airline workers' union has joined with private investors in seeking to buy out the firm, but details remain to be worked out. A judge has accepted the proposed sales terms in the bankruptcy hearings, but set Friday as a deadline. After that, the jets and other assets go on the auction block. See BBC. As with Pan Am and other old, established airlines in the United States, Varig fell victim to low-cost upstart airlines that were not burdened by high labor costs and pension obligations.