The new owner of Brazil's flagship airline Varig deposited US$75 million (euro59 million) as required to buy the struggling company but has canceled dozens of flights and stranded passengers in Brazil and abroad.
VarigLog, a former Varig subsidiary, made the deposit late Monday as part of its bid of nearly US$500 million (euro396 million), offered at auction last Thursday, to rescue the airline from liquidation.
VarigLog tried to suspend most of its national and international routes, maintaining only the lucrative shuttle between Rio de Janeiro and Sao Paulo, Brazil's biggest cities. The National Civil Aeronautics Agency, known as ANAC, vetoed the decision and ordered Varig to fly its assigned routes.
But Viacao Aerea Rio-Grandense SA, or Varig, has canceled 29 domestic and 10 international flights from Rio de Janeiro, the government news service Agencia Brasil said Tuesday.
Varig has been in financial trouble for years, with debts of around 8 billion Brazilian reals (US$3.6 billion; euro2.9 billion).
The airline is having trouble paying for landing and departure fees and fuel for its jets. More than two-thirds of its planes are grounded as leasing companies demand their craft back, and the company cannot pay for basic maintenance.
Varig's lawyer Fabio Carvalho said the airline has just 13 planes, down from 58 last December, and its monthly revenue has fallen to US$32 million (euro25 million) from US$197 (euro156) million in the same period.
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