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March 29, 2007, 10:08AM
Shares of Brazilian Carrier Gol Surge
By STAN CHOE AP Business Writer
NEW YORK — Shares of Brazilian airline Gol Linhas Aereas Inteligentes surged Thursday, after the company agreed to buy struggling rival Varig for $275 million in cash and stock. [...] Gol, the country's No. 2 carrier, said the deal to acquire Varig, Brazil's former flagship carrier, includes $98 million in cash, 6.1 million nonvoting shares and the assumption of $45 million of debentures. It will continue to operate the two as separate brands, with Gol remaining a low-cost, low-fare airline and Varig offering more upscale services.
Brazil Editor Carlos Adese in Latin Trade, March 2005...
Fasten Your Seatbelts
Cutting costs, TAM Airlines follows low-cost Gol's model to cater to Brazil's growing airline business.
[...] Some in the government believe that Varig could be profitable, yet they recognize that the airline's debts are nearly impossible to pay. Executives at TAM and Gol declined to comment on Varig's problems. Behind the scenes, the two companies are quietly negotiating with the government the possibility of taking control of Varig's national and international market share without taking on its overwhelming debts. Other pending items for Varig include the airline's employees pension fund and mileage credits owed to thousands of Varig frequent-fliers. On top of these unknowns, internal disputes rage inside the government itself over the best course for the former airline giant, a sure sign that progress will be slow at best. The battle to save Varig could turn out to be a long flight with many stops along the way.
March 29, 2007, 10:08AM
Shares of Brazilian Carrier Gol Surge
By STAN CHOE AP Business Writer
NEW YORK — Shares of Brazilian airline Gol Linhas Aereas Inteligentes surged Thursday, after the company agreed to buy struggling rival Varig for $275 million in cash and stock. [...] Gol, the country's No. 2 carrier, said the deal to acquire Varig, Brazil's former flagship carrier, includes $98 million in cash, 6.1 million nonvoting shares and the assumption of $45 million of debentures. It will continue to operate the two as separate brands, with Gol remaining a low-cost, low-fare airline and Varig offering more upscale services.
Brazil Editor Carlos Adese in Latin Trade, March 2005...
Fasten Your Seatbelts
Cutting costs, TAM Airlines follows low-cost Gol's model to cater to Brazil's growing airline business.
[...] Some in the government believe that Varig could be profitable, yet they recognize that the airline's debts are nearly impossible to pay. Executives at TAM and Gol declined to comment on Varig's problems. Behind the scenes, the two companies are quietly negotiating with the government the possibility of taking control of Varig's national and international market share without taking on its overwhelming debts. Other pending items for Varig include the airline's employees pension fund and mileage credits owed to thousands of Varig frequent-fliers. On top of these unknowns, internal disputes rage inside the government itself over the best course for the former airline giant, a sure sign that progress will be slow at best. The battle to save Varig could turn out to be a long flight with many stops along the way.
posted by Greg Brown at 2:25 PM
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