Source Pravda.Ru

Varig may ground 31 of its aircraft because of lack of maintaining

Brazil's financially strapped flagship carrier Varig may see more of its jets grounded because of lack of maintenance, two major Brazilian newspapers reported Thursday.

According to confidential reports circulated among Varig executives and obtained by the Gazeta Mercantil and the O Estado de Sao Paulo newspapers, some 31 of Varig's 64 aircraft could be grounded because of maintenance problems, the AP reports.

Varig had no immediate comment on the reports.

The airline, which has been undergoing a financial restructuring since June 17, has a total debt of 7.7 billion Brazilian reals (US$3.4 billion or Ђ2.8 billion).

Varig, which has 15 aircraft grounded, estimates it will need US$70 million (Ђ58 million) to boost maintenance to pre-crisis levels, the newspapers said.

The company plans to cut more than 1,550 jobs _ 13 percent of its work force _ by the end of 2006 in an effort to save about $168 million (Ђ139.3 million) annually. AM

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