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Last chance airline
01 November 2005
Lessors are still fighting for the return of their aircraft from Varig, as the airline's sympathetic bankruptcy judge gives it one more reprieve. Alexandra Lennane reports.
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airline
Aviation
Chapter 11
Airlines; Varig
Varig, the latest in a long line of sick Brazilian carriers, has bought itself yet another reprieve. As it lurches from crisis to crisis, the debt-stricken airline was granted another two weeks' protection from hungry and increasingly angry lessors, now owed more than $50 million. "This is just crisis management," says one source. "It is an uphill struggle for the airline to pay its daily bills, that's the real situation."
Varig, which is under Chapter 11 in Brazil, where the US bankruptcy law was conveniently introduced just a week before the carrier availed itself of the protection, faced a New York bankruptcy court at the end of October, pleading to be allowed to keep the 20 aircraft that lessors, including Gecas and ILFC, want back. Another 15 of its total fleet of 76 aircraft have already been grounded because of a lack of cash for maintenance. Pillsbury Winthrop partner Rick...
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