megala oikonomika problimata ehei i Varig
IFLC says Brazil's Varig must return 11 jets-report
Wed Jun 8, 2005 08:56 AM ET
SAO PAULO, Brazil, June 8 (Reuters) - Brazil's debt-ridden airline Varig (VAGV4.BR: Quote, Profile, Research) has been ordered by International Finance Leasing Corp. (IFLC), controlled by AIG International, to return 11 Boeing jets, the Valor Economico paper said on Wednesday.
According to the financial daily, IFLC said Varig must return five Boeing 737s, four Boeing 757s and two Boeing 777s, some of which are used on international flights, for late leasing payments.
Varig has suffered severe financial problems since the airline industry was hit by a recession in 2001. It has struggled to service net debts estimated at more than 6 billion reais ($2.5 billion) while trying to compete on the local market with TAM and upstart economy airline Gol.
Varig representatives were not immediately available for comment. No time frame was specified for returning the jets.
"We are still negotiating with them as they are being paid late. This type of threat is permanent and is part of the game," David Zylbersztajn, president of Varig's board, said, adding that IFLC had not yet sought the legal seizure of the planes.
IFLC seized one of Varig's planes for three days in Paris in January 2003 due to payment problems.
Brazil's government recently supported a plan by Portugal's TAP airline to invest in Varig to keep Brazil's largest international carrier in the air.
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