Varig


VARIG was the first airline founded in Brazil, in 1927. From 1965 until 1990, it was Brazil's leading airline, and virtually its only international one. In 2005, Varig went into judicial restructuring, and in 2006 it was split into two companies – Flex Linhas Aéreas, informally known as "old" Varig, heir to the original airline –now defunct, and "new" Varig, a new company, fully integrated into Gol Airlines.

History

Formation and Early Years (1927–1943)

Sociedade Anônima Empresa de Viação Aérea Rio-Grandense – VARIG was the first national airline established in Brazil. It was founded on in Porto Alegre, by Otto Ernst Meyer-Labastille, a German aviator decorated in the World War I, who immigrated to Brazil in 1921 and noticed how necessary air transportation was for a large country like Brazil. Varig was an off-spring of the German trade company and airline Condor Syndikat, thus sharing the same origin as Syndicato Condor, later renamed Serviços Aéreos Cruzeiro do Sul. Condor Syndikat gave the initial operational and financial support and for a short time Varig and the sister-company Syndicato Condor operated in partnership.
The first aircraft of VARIG was a ten-passenger Dornier Do J Wal flying boat, transferred from the assets of Condor Syndikat. This aircraft, named Atlântico, was also the first aircraft registered in Brazil as P-BAAA. Operations started on with a flight from Porto Alegre to Rio Grande via Pelotas. Varig inherited the route rights from Condor Syndikat which since had operated the service.
VARIG slowly but consistently in spite of difficulties added aircraft and destinations to its network initially focusing on the state of Rio Grande do Sul. On Varig began its first international route from Porto Alegre to Montevideo using its de Havilland DH 89 Dragon Rapide.
On 1941, as the United States declared war against the Axis and joined the Allies in the conflict, aviation supplies became scarce, particularly in terms of petrol and replacement parts. Because it used mostly German equipment and had a German Manager-Director, Varig faced particular difficulties. For this reason, Varig's first Manager-Director Otto Ernst Meyer resigned on and shareholders decided that the next Manager-Director had to be a native-born Brazilian. Érico de Assis Brasil was chosen but he died on an aircraft accident shortly after. It was in 1943 that Varig's first employee, Ruben Martin Berta, a descendant of Hungarian and German grandparents, was chosen as Manager-Director, a post he would retain until his death in 1966.

Expansion (1943–1966)

One of the first decisions of Ruben Berta was to pursue an expansion plan and to unify the fleet around only one type of aircraft. The chosen one was the Lockheed L-10 Electra. Another ground-breaking suggestion was made on when, based on social ideas found on the papal encyclicals Rerum novarum and Quadragesimo anno and on Jean-Jacques Rousseau's The Social Contract, Berta proposed and the assembly approved the transfer of 50% of Varig's shares to a not-for-profit foundation belonging to the employees. The aim of the foundation was to provide health, financial, social and recreational benefits to its employees. Decades later this foundation would be called.
In 1946, with the addition of Douglas DC-3 and later the Curtiss C-46 to its fleet, Varig was able to greatly increase its network by adding cities in the states of Santa Catarina, Paraná, São Paulo, and Rio de Janeiro, facing fierce competition with Real Transportes Aéreos, and SAVAG. On, Varig bought Aero Geral, a small airline with concessions to fly from Natal until Santos. With this purchase Varig greatly enlarged its operations in Brazil, extending services beyond Rio de Janeiro until Natal along the Brazilian coast and was thus better prepared to compete with Panair do Brasil and Cruzeiro do Sul. In 1949 the Brazilian government granted to Varig the concession to fly to the United States, since the original airline which had the concession, Cruzeiro do Sul, was unable to operate the services. The inaugural flight between Rio de Janeiro-Galeão and New York-Idllwild was on. The services were operated by three new Lockheed L-1049G Super Constellations. On flights to Buenos Aires using Curtiss C-46s started. In January 1956 Varig served 55 cities in Brazil and four abroad, being the second Brazilian airline in terms of passengers transported.
In 1954, sensing the need for more modern aircraft, new Convair 240s were purchased. The addition of the Lockheed Super Constellation and the Convair 240 provoked a deep change of mentality in the culture of Varig, with the introduction of a more cosmopolitan corporate image that would remain until 1996.
at Congonhas Airport Sao Paulo in 1972
On Varig, Cruzeiro do Sul and VASP initiated the air shuttle services between Rio de Janeiro-Santos Dumont and São Paulo-Congonhas airports, the first of its kind in the world. The three companies coordinated schedules and operations, and shared revenue. The service was a response to the competition imposed by Real Transportes Aéreos. The idea, baptized as Air bridge, inspired on the Berlin Airlift was so successful that it was abandoned only in 1999. Flights operated on an hourly basis initially by Convair 240, Convair 340 and Saab 90 Scandia. In a few months the shuttle service led by Varig won the battle against Real, which was bought by Varig in 1961. Sadia Transportes Aéreos joined the service in 1968. Between 1975 and 1992 it was operated exclusively by Varig's Lockheed L-188 Electra which for the sake of neutrality did not have the Varig name on the fuselage.
in 1984
On Varig started to fly their new 35-seat Sud Aviation SE-210 Caravelle I between Brazil and New York-Idlewild, stopping at Belem, Trinidad and Nassau; on, the Caravelles were replaced by the Boeing 707-441, which could fly from Rio de Janeiro-Galeão to New York-Idlewild non-stop. The Caravelles were switched to operate trunk routes within Brazil and to Buenos Aires-Ezeiza and Montevideo.

Between May and August 1961, after a lengthy battle for the Brazilian market, Varig took over the Consortium Real-Aerovias-Nacional, which was in serious economic difficulty. This purchase not only made Varig the largest airline in South America but also granted rights to other cities in Latin America, Miami, the West Coast of the United States and to Japan.
European services started on. Varig had been lobbying for European concessions for more than ten years, but after the sudden shutdown of Panair do Brasil by the Brazilian military government Varig was granted rights previously held by Panair and was ordered to immediately operate all scheduled services, including Panair's flight scheduled to depart that very night from Rio de Janeiro-Galeão to Recife, Lisbon, Paris-Orly and Frankfurt.
Varig also inherited Panair's two Douglas DC-8-33 and the agreement with TAP-Transportes Aéreos Portugueses to operate the Voo da amizade between São Paulo-Congonhas, Rio de Janeiro-Galeão and Lisbon, with stops in Recife and Sal, now using Varig's Lockheed L-188 Electra. Originally started on 30 November 1960 by Panair and TAP, only Brazilian and Portuguese citizens or foreigners with permanent residence in Brazil or Portugal were entitled to the purchase of tickets for these flights, which were extremely popular due to their low fares. Those flights operated until 1967.
On, Rubem Berta died of a heart attack. The following day the administrative board elected Erik Oswaldo Kastrup de Carvalho, Berta's right-hand and former Panair employee, as Varig's fourth Director-President.

Consolidation (1966–2000)

The 1973 oil crisis brought to Varig the need to replace its older generation aircraft with newer ones. For international, the chosen type was the Douglas DC-10, which had its first flight with Varig on and this aircraft had the range to serve European destinations including Paris without a refuelling stop en route. In the domestic arena gradually the Boeing 737-200 became the work-horse.
Still as a consequence of the 1973 oil crisis which caused many difficulties to airlines, on Varig acquired a controlling interest in Cruzeiro do Sul, which was in a particularly delicate economic situation. Cruzeiro do Sul was fully integrated into VARIG on.
On, the Brazilian Federal Government created the Brazilian Integrated System of Regional Air Transportation and divided the country in five different regions, for which five newly created regional airlines received a concession to operate air services. Rio-Sul Serviços Aéreos Regionais S/A was the fourth of those regional airlines to be made operational and it was established by Varig in partnership with Top Táxi Aéreo, Bradesco Bank, and Atlântica-Boavista Insurance. Its services started on and its operational area comprised roughly the Southern and parts of the Southeast regions of Brazil. Soon Rio-Sul was operating as Varig's feeder-airline.
In February 1979, Carvalho left the Presidency of Varig due to serious illness, being succeeded by Harry Schuetz for a short time, by Hélio Smidt, Berta's nephew, in 1980, and by Rubel Thomas in 1990.
The 1980s were marked by a modernization of the fleet, growth in the number of destinations and increasing financial problems originated in high inflation and in a foreign currency crisis. Furthermore, with the end of the military régime and the return to democracy in 1985, Varig lost its intimate connection with the ruling powers. In 1990, with a gradual deregulation promoted by the Federal Government, VASP and Transbrasil were authorized to fly to international destinations, breaking an almost-monopoly held by Varig since 1965. More international carriers were also authorized to fly to Brazil, greatly increasing competition. Slowly Varig began to lose its financial health, aggravated by the early 1990s world recession and administration problems. In 1988, a few years after the inauguration of São Paulo–Guarulhos International Airport, Varig decided to move its operational hub from Rio de Janeiro to São Paulo.
departs Lisbon Portela Airport in 1995
In June 1995, Varig bought 49% of the shares of Pluna Uruguayan Airlines.
In an attempt to solve its increasing problems, Carlos Willy Engels became president in 1995 and in 1996 he was succeeded by Fernando Abs da Cruz Souza Pinto, who would be the last president of the consolidation phase in the history of the company. He developed an ambitious project to bring financial and operational health back to the company. The two most visible milestones of this project were the new corporate image launched on 15 October 1996 - the first change since 1955 - and the membership of Varig on Star Alliance, as of. Varig was its sixth member airline, and first to join after it was launched only 5 months earlier.
In spite of some success in the re-organization of the company, Pinto did not have full support of Ruben Berta Foundation, the controller of Varig and, as a consequence, he left the Presidency of Varig on. That same year he became the CEO of TAP Portugal and successfully re-organized that airline. Pinto was succeeded by Ozires Silva, former president of the Brazilian aircraft manufacturer Embraer.

Decline and final split (2000–2006)

The administration of Ozires Silva, which lasted for only 2.5 years, started with major restructuring in the company, aiming at making Ruben Berta Foundation more powerful and the President-Director weaker. Also, on, all cargo operations were united under a new airline named VarigLog.
Despite the reforms, Varig posted a deficit for first time in its history: R$148.6 million by the end of 2000, and then R$523 million in the following year.
In 2001, low-cost airline Gol Airlines began operations, with VASP and Transbrasil cutting fares in response. The loss of passengers to competitors caused Varig to lose its top position in the domestic market share to TAM Airlines, for the first time since 1961. The September 11 attacks also weakened Varig’s operational and financial situation.
In 2002, Ruben Berta Foundation merged the administration of Varig and its subsidiary Rio Sul Serviços Aéreos Regionais. The three brands were used separately with Rio-Sul and Nordeste providing feeder services to Varig.
Year-long discussions to merge Varig with TAM Airlines ended unsuccessfully in 2004 and the same year Varig fell to third place in the Brazilian domestic market share, behind TAM and Gol.

VARIG applied to the Commercial Bankruptcy and Reorganization Court in Rio de Janeiro on, for the commencement of "judicial reorganization" proceedings pursuant to the New Bankruptcy and Restructuring Law of Brazil. The request was granted on 22 June 2005. VARIG continued to provide services despite its financial troubles.
in 2004
In order to raise funds, the Bankruptcy and Reorganization Court decided to sell two of Varig's subsidiaries:
After two unsuccessful attempts to auction the airline as a whole, the bankruptcy court decided to split the airline in two different judicial entities, informally known as "old" Varig and "new" Varig:
Since, the former Viação Aérea Rio-Grandense S/A was judicially known as Nordeste Linhas Aéreas S/A, and operated under the brand-name Flex Linhas Aéreas. On 18 August 2009, the National Civil Aviation Agency of Brazil renewed the authorization of Flex to operate non-regular passenger, cargo and postal services. Therefore, Flex operated flights on behalf of other airlines, as contracted.
Between 17 June 2005 and 2 September 2009, "old Varig" remained in Recovery Order in the 1st Business Court of Rio de Janeiro, under the leadership of Judges Luiz Roberto Ayoub and Miguel Dau. After the bankruptcy protection was lifted, the administration of the airline could have returned to its original owner, Fundação Ruben Berta, which still owned 87% of the shares of Varig. However, Fundação Ruben Berta preferred to keep a judicial administrator.
In September 2006 "old" Varig sold its participation in PLUNA to the Uruguayan Government.
On, Varig Brazilian Airlines was suspended from membership in Star Alliance for not fulfilling membership pre-requisites, and on, the IATA code RG and the callsign Varig officially ceased to exist.
As a result of accumulated debts, on, at the request of the airline administrator, the 1st Business Court of Rio de Janeiro declared Flex bankrupt and initiated the process of liquidation. However, on 10 September, the bankruptcy process was suspended at the request of Ruben Berta Foundation and the company returned in practical terms to recovery order status until the validity of the bankruptcy is judged.

"New" Varig

VRG Linhas Aéreas S/A was fully integrated in Gol Airlines.
On, the "new" Varig canceled all its flights, except for Rio de Janeiro-São Paulo shuttle service, which remained in operation through an agreement with "old" Varig. On, "new" Varig announced that it would cut 60% of its staff.
Between September and November 2006, "new" Varig announced its intentions to gradually resume some international and domestic flights. On 14 December 2006, the National Civil Aviation Agency of Brazil issued the final certificate to "new" Varig, making it fully operational. Soon after the certificate was granted, orders for 16 aircraft were announced, to bring the fleet to 31 aircraft and the operational agreement with "old" Varig expired.
Before and after relaunch in December 2006, "new Varig" struggled greatly to find a strategic partners, due to lack of credibility, affecting aircraft contracts, network and personnel inherited from "old" Varig. "New" Varig was facing monthly losses as high as US$20 million, and MattlinPatterson was unwilling to invest more money in the company, putting "new" Varig in extreme economic difficulties.

On, Gol Airlines purchased "new Varig" for US$320 million, and announced that VRG Linhas Aéreas, the operator of the brand VARIG, would continue to operate under its original name. The transaction was completed on.
The new owner radically restructured the fleet, the network, eliminated the First Class cabin from the aircraft, and gradually transformed the brand Varig into the arm of Gol Group specialized in international scheduled and charter medium and long-haul destinations. On, Varig's new corporate image was unveiled, stressing the orange colour of Gol.
On Gol was merged into VRG Linhas Aéreas and thus VRG Linhas Aéreas became an airline with two different brands: Varig and Gol. As a consequence, on mid-April 2009, Varig's booking systems were integrated into Gol's and the Smiles frequent flyer program was reformulated to include Gol. In June 2009, "new" Varig ceased to operate its own flights and started to use Gol's flight numbers.
From 2006 to 2009 "new" Varig was obliged by contract to purchase a minimum of 140 hours/month of services from "old" Varig. Therefore, some of VRG Linhas Aéreas flights operated with Gol flight numbers were actually flown with chartered aircraft from Flex Linhas Aéreas.

Destinations

Historical fleet

The fleet list below is related to "old" VARIG and based on the standard published Varig history.

AircraftTotalYears of operationNotes
Dornier Do J Wal11927–1930First aircraft registered in Brazil
Dornier Merkur11928–1930
Morane-Saulnier 13011930–1931
Klemm L-2521930–1937
Nieuport-Delage 64111931
Junkers A-50 Junior31931–1944
Junkers F.13 ke21932–1948
Messerschmitt Bf-108 Taifun11936
Messersschmitt M-20B11937–1948
Junkers Ju 52/3m11938–1942
Focke-Wulf Fw 58C Weihe11940–1941
de Havilland DH 89 Dragon Rapide11942
CANT Z.101211942
Fiat G.211942–1945
Lockheed L-10 A/E Electra111943–1955
Douglas DC-3/C-47471946–1971
Noorduyn C-64 Norseman11947–1950
Curtiss C-46/Super C-46 Commando291948–1970
Convair 240131954–1969
Lockheed L-1049G/H Super Constellation101955–1967
Sud Aviation SE-210 Caravelle I 31959–1979
Boeing 707-44131960–1979
Convair 340/440151961–1967
Douglas DC-6B51961–1968
Lockheed L-188 A/C Electra151962–1992
Convair 990A31963–1971Received from Aerovias Brasil
Douglas DC-8-3321965–1975Received from Panair do Brasil
Hawker Siddeley HS 748 111966–1976
Boeing 707-320/320C171966–1990
Beechcraft 99 Airliner11968
Fairchild Hiller FH-227B41970–1975
Boeing 727-100111970–2006
McDonnell Douglas DC-10-30161974–2006
Boeing 737-200201975–2003
Airbus A300-B4-20341980–1990
Boeing 747-20041981–1996
Boeing 747-300/300 Combi51985–2000
Boeing 767-200/200ER91986–2004, 2008Some operated for "new" Varig
Boeing 737-300481987–20091 to Flex Linhas Aéreas
Some operated for "new" Varig
Boeing 767-300ER161989–2008Some operated for "new" Varig
Boeing 747-40031991–1994
McDonnell Douglas MD-11261991–2007Some operated for "new" Varig
Boeing 737-40082000–2006
Boeing 737-700102001–2006
Boeing 737-80022001–2006
Boeing 777-200ER82001–2006
Boeing 737-500252003–2006
Boeing 757-20042004–2006

Airline Affinity Program

Smiles was Varig's Frequent-flyer program until 20 July 2006. Points could be used for services from Varig, its subsidiaries, and its Star Alliance partners including flights, upgrades, holidays, hotel stays and car rentals. Smiles was part of the "new Varig" package bought by Gol Airlines. All miles were honored and eventually Smiles became Gol's own Frequent Flyer program.

Accidents and incidents

, Aviation Safety Network reports 39 accidents or incidents for Varig since.

Major accidents involving fatalities