=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/n/a/2006/07/21/internatio= nal/i141330D29.DTL --------------------------------------------------------------------- Friday, July 21, 2006 (AP) Brazil Nixes Varig Plan to Suspend Flights (07-21) 14:13 PDT RIO DE JANEIRO, Brazil (AP) -- The Civil Aeronautics Agency on Friday vetoed a plan by Brazil's struggling airline Varig to suspend most flights and ordered the company to fly all its assigned routes. Viacao Aerea Rio-Grandense SA, or Varig, must fly its five assigned national routes and five international routes, Agency President Milton Zuanazz told the government news service Agencia Brasil. The struggling 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, which was sold Thursday to its former subsidiary VarigLog, had announced that it was temporarily suspending all flights except for the lucrative shuttle between Rio de Janeiro and Sao Paulo. VarigLog said late Thursday it would cancel its international flights and most domestic routes until July 28 but would increase the number of shuttles on the Rio-Sao Paulo route from 10 to 36 a week. Varig said on its Web site that passengers with tickets for canceled flights will be transferred to other airlines and that the reduction in flights was part of a strategy to "rapidly resume growth and increase profitability." VarigLog, controlled by the investor group Volo do Brasil, bought Varig = at an auction Thursday for nearly $500 million, rescuing the airline from liquidation. Varig will operate at first with just 13 planes but hopes to increase its fleet to 80 planes within six months, Volo do Brasil said. Varig has been in financial trouble for years, with debts of around 8 billion Brazilian reals ($3.6 billion). Long Brazil's leading airline, Varig has fallen behind TAM SA and Gol Linhas Aereas Inteligentes on the domestic market. ------------------------= ---------------------------------------------- Copyright 2006 AP