Brazilian Airline VASP Keeps Singing the Blues

VASP, the formerly hot Brazilian air carrier, announced this week its intention to keep several aircraft out of the skies as employees turned up the heat on the front office to get their back salaries before the situation gets worse off.

Last weekend, the South American nation´s fourth-largest air company ordered all domestic flights with half of their seats empty be called off.

Several jetliners were grounded in recent days in what experts believe is the homestretch of a serious financial situation that´s little by little sneaking up on the entire Brazilian aviation industry.

VASP owes some $890 million, the largest chunk of that money to state-run companies Infraero and Petrobras -a General Electric affiliate- and to the Brazilian government.

The airline is putting up with a dozen bankruptcy lawsuits in federal courts. According to Brazilian laws, if an air carrier keeps part of its flights cancelled for more than six months, the company may have its flying permit overridden.

Members of the National Aviation Trade Union made a petition before a labor judge in Brasilia to hasten the legal process for a complaint filed by the company´s 4,800 employees.

These workers are also demanding a more active role by regional authorities in the state of Sao Paolo to keep 40 percent of the carrier´s shares. VASP was privatized in the 1990s.