Varig caught in turbulence

Varig, Brazil’s largest commercial aviation company, announced the layoff of 350 employees, among pilots and flight stewards, as a result of the financial fix the carrier is in. The action stems from an inflated payroll coming after the giveback of thirteen planes the company had previously leased.

Of the full amount of furloughed workers, there are 250 flight stewards and 100 pilots. Varig’s total staff, including personnel in travel agencies and hotels, comprises 18,000 employees in all. Experts say the company is walking on a pretty tight financial rope and way into a $750 million debt.

A third of that money will be overdue this year. Varig’s woes are very much in sync with the crisis that international commercial aviation is going through right now, coupled with an ordeal of its own.

At the government’s request, the airline is negotiating a merger proposal with TAM, the country’s second-largest carrier. Varig and TAM started sharing their international flights with an offer of eleven daily flights to Buenos Aires.