12/02/12, 12:05:25 EST

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Brazilian airline BRA suspends flights, seeks cash

reuters.com

Brazilian airline BRA said on Tuesday it would temporarily suspend all flights while it seeks a cash infusion to keep operating, a move that is sure to wreak further havoc on Brazil's crisis-hit aviation system.

BRA, which started as a small charter airline in 1999 and now flies to 26 destinations in Brazil and three more abroad, said in a statement it had asked the country's aviation authority for permission to suspend all flights beginning on Wednesday.

"BRA is seeking a cash infusion from its shareholders so that it can normalize its operations," said a spokeswoman for the airline, without specifying how much money it needs.

Last December, BRA sold a 20 percent stake to a group of seven investors including Goldman Sachs, Bank of America, Gavea Investimentos, the hedge fund of former Brazilian central bank governor Arminio Fraga, and Darby Investments, the firm founded by former U.S. Treasury Secretary Nicholas Brady.

BRA Transportes Aereos, as the carrier is formally known, has a fleet of 10 airplanes, eight Boeing 737s and two Boeing 767s. In June, it signed a deal with Brazilian aircraft maker Embraer to buy 20 passenger jets for an estimated $736 million.

BRA, controlled by brothers Humberto and Walter Folegatti, is ranked fourth in Brazil with 4.6 percent of the domestic aviation market. Its main rivals are TAM Linhas Aereas and Gol Linhas Aereas.

BRA's decision to suspend flights is sure to translate into more headaches for travelers in Brazil, who have been subjected to repeated delays and cancellations for more than a year.

 Printable Version  | published Nov 06, 2007