December 23, 2002 / The Shipping Times (SAO PAULO) Brazil's Viacao Aerea Rio- Grandense SA, Latin America's biggest carrier, said it plans to return 10 aircraft manufactured by Empresa Brasileira de Aeronautica SA as it seeks to cut costs. Varig is negotiating with its leasing company to return three ERJ-145 regional jets, which seat passengers, and seven 30-seat turboprop Brasilia planes, said Paulo Cesar Fonseca, Varig's spokesman. Mr Fonseca declined to identify the leasing company. 'The contracts are expiring and we are in negotiations to give the planes back,' Mr Fonseca said. 'We don't want to renew those contracts because we have an excess of planes after we merged our operations with units Rio Sul and Nordeste.' Varig, which has a fleet of 114 aircraft, is trying to cut costs to make payments on its US$900 million debt and has returned 14 Boeing 737 and 767 aircraft this year. Brazil's weakening currency against the dollar has raised Varig's costs linked to the dollar such as leasing and fuel. The company has also been hurt by lower demand triggered by a slow economy and the Sept 11 terrorist attacks. The carrier has been talking to creditors to postpone payments. Valor Economico newspaper reported Brazil's development bank, BNDES, leased the Embraer aircraft for Varig. Brazil's airport authority Infraero has demanded Varig pay 2 million reais a day to amortise debt so the carrier can use Brazilian airports. - Bloomberg