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In October 2000 Varig Log was created already as the largest cargo airline in Latin America, with eleven cargo airplanes. In 2001 VEM (Varig Engineering and Maintenance) became a separate company and was ranked as one of the top ten in the world.

At the end of 2001 VARIG received its first Boeing 777-200ER and Boeing 737-800 with winglet.
The two aircraft represented the future, Boeing 777 became new fleet star and would replace MD-11, while Boeing 737-800 would replace Boeing 737-200 and most Boeing 737-300. The first Boeing 777 was named "Otto Meyer" and began service on Rio de Janeiro - Sao Paulo - London - Copenhagen route. The second B777 was named "Ruben Berta" and started flights on Rio de Janeiro - Sao Paulo - Paris - Amsterdam route.  But 2001 was also a very difficult year for the entire industry. The two Brazil's largest airlines, Varig and Tam, started a codeshare agreement in domestic market, in 2003, ended at the same year.

In 2003 and 2004 VARIG started a full restructuring program, culminating with the merger with its regional subsidiaries Rio Sul and Nordeste. After the merger, VARIG’s fleet reached more than 120 aircraft and incorporated Boeing 737-500 and Embraer ERJ-145. Also in 2004 VARIG received more Boeing 777 and four Boeing 757-200.
The B757 soon pleased passengers, and became known as the aircraft more comfortable in the domestic market at the time. Regarding the network, VARIG became the first company in Latin America to operate to China. Together with Air China, VARIG began selling tickets on São Paulo - Munich - Beijing route.

Despite efforts, VARIG filed for bankruptcy in 2005. To capitalize itself, the company sold VEM for Tap and Varig Log for Volo Brazil.
However, this only gave time to survive few more months. In 2006 the situation reached the limit, the company had no money. On evidence that VARIG was a single company, its employees went to work without receiving salary. In a demonstration of love and trust in the company's future, VARIG employees brought items of their own homes as coffee powder to serve the passengers. Meanwhile the fleet decreased every day, aircraft stopped operating because the company had no money to do maintenance or because they were arrested for no leasing payment. As a consequence, the network was adjusted to fit a smaller fleet. Many destinations started being canceled such as Nagoya, Tokyo, Cancun, Lisbon, Milan, Madrid, Munich, Paris, Los Angeles, New York, Mexico City, Montevideo, Asunción and Bogotá. By the beginning of July 2006, VARIG was reduced to a fleet of ten aircraft and seven destinations.

In July, 2006 VARIG was divided into two companies and auctioned. The "new Varig" was sold to Volo Brasil continued to operate under VARIG’s license until get its own license to operate. On December 14, 2006 VARIG made the last flight. Thereafter "new VARIG" obtained its own license. In April, 2007 the "new VARIG" was bought by Gol airlines and started a rapid fleet and network expansion. But the plan did not go as expected and Gol gave up investing in VARIG brand. VARIG's remaining aircraft were slowly disappearing from the skies, until completely disappeared in August, 2014. The "old VARIG" tried rebuild and launched a charter airline named "Flex" on March, 2007. But in a short time the company ceased again. On August 20, 2010 was declared the bankruptcy of S.A. Viação Aérea Rio Grandense - VARIG.

 

 

                              HOW WAS FLYING IN THE 2000s?

What was already influencing Brazil since the 90s, arrived in 2000 after the creation of low cost, low fare Gol airlines. In Brazil, the effect of Gol made the “traditional airlines” adapt itself to compete in this new reality. After Gol airlines, ticket’s price dropped by half and aircraft now have more seats and less space.
 

VARIG’s Economy Class offered more space compared to other airlines. Meals were another differential, main meal (usually hot), accompanied by salad, fruit, chocolate and various beverages. Passenger could also request special meals such as vegetarian, gluten free and lactose free.

In the 2000s business class on domestic flights was extinguished. In VARIG’s Business Class passengers enjoyed more space and greater reclining. In addition on board service offered two entry options, four hot meal options and a dessert with fruit or cheese. Drinks follow the concept VARIG’s First and Wines of the World program. The entertainment of VARIG’s Business had individual video devices in seven different languages. On flights over six hours, passengers receive high quality “nécessaire” with comfort items and products of Amazon forest.

VARIG’s First Class offered personalized services. The service followed the "Restaurant Style" philosophy, with a diverse menu and option for lower calorie meal and ingredients that minimize jet lag effects. Passengers also had individual video entertainment in seven different languages. Passengers received high quality “nécessaire” with comfort items and products of Amazon forest.


 

 

2000s

VARIG Fleet:
32xBoeing 737-300
04xBoeing 737-400
15xBoeing 737-500
02xBoeing 737-700
02xBoeing 737-800
04xBoeing 757-200
06xBoeing 767-300ER
06xBoeing 777-200ER
14xMcDonnell Douglas MD-11
11xEmbraer ERJ-145

TOTAL: 96

VARIG LOG Fleet:
04xBoeing 727-100F
04xBoeing 727-200F
03xDouglas DC-10-30F
01xMcDonnell Douglas MD-11
F
TOTAL: 12

Pluna Uruguay Fleet:
01xATR-42-300
03xBoeing 737-200
01xBoeing 737-300
01xBoeing 757-200
01xBoeing 767-300ER

TOTAL: 7

Domestic Destinations:
37 cities

 

International Destinations:
Montevideo, Punta Del Este, Buenos Aires, Cordoba, Santiago, Asuncion, Santa Cruz de La Sierra, La Paz, Lima, Bogota, Caracas, Aruba, Mexico City, Cancun, Miami, Los Angeles, New York, Lisbon, Madrid, Paris, Milan, Frankfurt, Munich, London, Copenhagen, Amsterdam, Tokyo, Nagoya

 

Passengers: 28 millions (average 28,67 million per year)

 

 


VARIG's international route map - 2000s / Boeing 757

 

                              FOCUS:  Varig's crisis

Many believed that it was impossible VARIG end. After all was a national pride, situated between the largest and best airlines in the world.
VARIG was not the only one, several traditional airlines like Pan Am, Eastern and SwissAir went bankrupt for not being able to adapt to the new market reality. The list would be much higher if European airlines were not save by the government, such as Air France, KLM, Tap, Lufthansa and many others.
To understand it better we need return to the 60s, more precisely in February 1965. At that time the military regime in Brazil had just begun. Panair do Brasil was the main brazilian airline and its major shareholder (Mário Wallace Simonsen) was João Goulart and Juscelino Kubitcheck friend. Because of that Panair became an enemy of the government. On February 10, 1965 Panair's president received a telegram informing that the company's operations were suspended. Five days later, the company was declared bankrupt, all national routes were transferred to Cruzeiro and international routes to VARIG. On the same night VARIG's Boeing 707 were ready to take off and perform all Panair's routes, without any delay. It was clear that Panair's end was planned months before, otherwise it would be impossible that VARIG could operate all Panair's international routes on the same day that it closed.
Panair episode revealed how big influence in government was essential to survive and grow. As all depending on government approval, for VARIG was easier to bring new aircraft and expand its routes. Meanwhile other companies like VASP and Transbrasil found difficulties to renew the fleet and expand.
In late 80s the military regime ended and Brazil became a democracy again. In March 1990 occurred the deregulation of the Brazilian commercial aviation market. Now, finally, the airlines could compete and charge as they wanted. This caused a radical change in the market. The USA market was deregulated in 1978, and many new airliens was established, but also many traditional airline failed to adapt.
In Brazil there was also many new airlines, mainly regional and charter. VARIG lost its monopoly on international routes and now had to compete with more airlines. Before only VARIG and Pan Am had flights between Brazil and the USA, in less than one year they had to compete with VASP, Transbrasil, Eastern, American Airlines, United, Tower Air, Delta and Continental. If VARIG and Pan Am used to fly with crowded Boeing 747 and high tariffs, now prices fell to less than half and the aircraft flew empty.
Besides problems in the international market, VARIG also began to face the increasingly competition of Tam in the domestic market. While Rio Sul (VARIG's subsidiary) still flying with Fokker F-50 turboprop, Tam had modern, faster and more comfortable Fokker F-100 jet. Tam grow dramatically in the 90s and VARIG brought the Boeing 737-500 with an extremely comfortable configuration (only 107 seats) and ERJ-145 jets. But Tam went further, bringing Airbus A319 and A320 with greater levels of comfort and technologies. In 1998 Tam also brought Airbus A330-200 (with individual monitors in all classes and seats that reclined 180 degrees in business class) and started flights to Miami and Paris, and compete with already outdated VARIG's MD-11.
After all these changes, VARIG began to lose lots of money and must restructure. In 1994 VARIG returned all Boeing 747-400, which had received just three years ago. The problem was that these aircraft were acquired with a Japanese bank and the value of the transaction was in yen. There was a great appreciation of Japanese currency against Brazilian currency and Boeing 747-400 leasing was so expensive that even with 100% occupancy it still gave loss. Moreover VARIG also withdrew all Boeing 747-300, Boeing 727-100, Boeing 737-200 and Douglas DC-10-30.
VARIG also suffered with brazilian government's plans to try to control inflation. VARIG's fares were "frozen", causing even more losses. Fundação Ruben Beta realize that the situation was not good and began to intervene more and more. The Foundation that was created by Ruben Berta to protect the company, was now helping to take it down. Fundação Ruben Berta was owned by VARIG's employees and dominated more than 80% of company shares. Any member of the association could be president and often the person had no technical knowledge. The Foundation was totally against fire employees, but the company was shrinking and could not maintain the same number of employees. As an example, in 2006, VARIG had about 60 aircraft and Tam had more than 80, but VARIG had twice employees.
In 1995 Fundação Ruben Berta fired, for the first time, VARIG's president. Between 2002 and 2005 VARIG had no less than nine presidents, all fired by Fundação Ruben Berta.
With debts rising, VARIG sold all its aircraft and leased back. In 2001 Gol enters in the market with low cost, low fare concept and made ticket prices tumble. Tam becomes the leader in domestic market. On September 11, 2001 the commercial aviation enters in a financial crisis after the terrorist attacks in New York. While Tam canceled international flights and reduced frequencies, VARIG did nothing and flew with empty aircraft, accumulating more losses.
In 2003 there was a merger proposal between Varig and Tam and both airlines started a code-share in the domestic market. VARIG was benefited from an improvement in aircraft's occupation, but many passengers exchanged VARIG for Tam, after ealize that Tam's aircraft were more modern. The merge failed because it encountered strong resistance of Fundação Ruben Berta and VARIG staff. The output was then a merger between VARIG, Rio Sul and Nordeste later in 2003. However with Fundação Ruben Berta preventing any measures that went against its will, VARIG fate was sealed. The only salvation was being purchase by another company or government interference. In June 2006 the situation became untenable and VARIG stopped flying.


 

 

 


Also know about all aircraft operated by VARIG!

 

 

 

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