Varig (Viação Aérea Rio-Grandense, 'Rio Grandean Airways') was the first airline founded in Brazil, in 1927. From 1965 until 1990, it was Brazil's leading airline and virtually its only international one. In 2005, Varig went into judicial restructuring, and in 2006 it was split into two companies: Flex Linhas Aéreas, informally known as "old" Varig, heir to the original airline, now defunct; and "new" Varig, a new company, fully integrated into Gol Linhas Aéreas Inteligentes.
Formation and early years (1927–1943)
Sociedade Anônima Empresa de Viação Aérea Rio-Grandense – VARIG was the first national airline established in Brazil. It was founded on 7 May 1927, in Porto Alegre, by Otto Ernst Meyer-Labastille, a German aviator decorated in World War I, who immigrated to Brazil in 1921 and noticed how necessary air transportation was for a large country like Brazil. Varig was an off-spring of the German trade company and airline Condor Syndikat, thus sharing the same origin as Syndicato Condor, later renamed Serviços Aéreos Cruzeiro do Sul. Condor Syndikat gave the initial operational and financial support, and for a short time Varig and the sister-company Syndicato Condor operated in partnership.
The first aircraft of VARIG was a ten-passenger Dornier Do J Wal flying boat, transferred from the assets of Condor Syndikat. This aircraft, named Atlântico, was also the first aircraft registered in Brazil as P-BAAA. Operations started on 22 June 1927 with a flight from Porto Alegre to Rio Grande via Pelotas. Varig inherited the route rights from Condor Syndikat which since 22 February 1927 had operated the service.
VARIG slowly but consistently in spite of difficulties added aircraft and destinations to its network initially focusing on the state of Rio Grande do Sul. On 5 August 1942, Varig began its first international route from Porto Alegre to Montevideo using its de Havilland DH 89 Dragon Rapide.
In 1941, as the United States declared war against the Axis and joined the Allies in the conflict, aviation supplies became scarce, particularly in terms of petrol and replacement parts. Because it used mostly German equipment and had a German manager-director (president), Varig faced particular difficulties. For this reason, Varig's first manager-director Otto Ernst Meyer resigned on 24 December 1941 and shareholders decided that the next manager-director had to be a native-born Brazilian. Érico de Assis Brasil was chosen but he died on an aircraft accident shortly after. It was in 1943 that Varig's first employee, Ruben Martin Berta, a descendant of Hungarian and German grandparents, was chosen as manager-director, a post he would retain until his death in 1966.
One of the first decisions of Ruben Berta was to pursue an expansion plan and to unify the fleet around only one type of aircraft. The chosen one was the Lockheed L-10 Electra. Another ground-breaking suggestion was made on 29 October 1945, when, based on social ideas found on the papal encyclicals Rerum novarum and Quadragesimo anno and on Jean-Jacques Rousseau's The Social Contract, Berta proposed and the assembly approved the transfer of 50% of Varig's shares to a not-for-profit foundation belonging to the employees. The aim of the foundation was to provide health, financial, social and recreational benefits to its employees. Decades later, this foundation would be called Fundação Ruben Berta.
In 1946, with the addition of Douglas DC-3 and later the Curtiss C-46 to its fleet, Varig was able to greatly increase its network by adding cities in the states of Santa Catarina, Paraná, São Paulo, and Rio de Janeiro, facing fierce competition with Real Transportes Aéreos and SAVAG. On 29 February 1952, Varig bought Aero Geral, a small airline with concessions to fly from Natal to Santos. With this purchase, Varig greatly enlarged its operations in Brazil, extending services beyond Rio de Janeiro to Natal along the Brazilian coast and was thus better prepared to compete with Panair do Brasil and Cruzeiro do Sul. In 1949, the Brazilian government granted Varig the concession to fly to the United States, since the original airline that had the concession, Cruzeiro do Sul, was unable to operate the services. The inaugural flight between Rio de Janeiro–Galeão and New York–Idlewild (later renamed John F. Kennedy International Airport) was on 2 August 1955. The services were operated using three new Lockheed L-1049G Super Constellations. On 30 May 1953, flights to Buenos Aires using Curtiss C-46s started. In January 1956, Varig served 55 cities in Brazil and four abroad, being the second Brazilian airline in terms of passengers transported.
In 1954, sensing the need for more modern aircraft, new Convair 240s were purchased. The addition of the Lockheed Super Constellation and the Convair 240 provoked a deep change of mentality in the culture of Varig, with the introduction of a more cosmopolitan corporate image that would remain until 1996.
On 6 July 1959, Varig, Cruzeiro do Sul and VASP initiated air shuttle services between Rio de Janeiro–Santos Dumont and São Paulo–Congonhas airports, the first of its kind in the world. The three companies coordinated schedules and operations, and shared revenue. The service was a response to the competition imposed by Real Transportes Aéreos. The idea, baptized as Air bridge (Portuguese: Ponte Aérea), inspired by the Berlin Airlift, was so successful that it was abandoned only in 1999. Flights operated on an hourly basis initially by Convair 240 (Varig), Convair 340 (Cruzeiro) and Saab 90 Scandia (VASP). In a few months the shuttle service led by Varig won the battle against Real, which was bought by Varig in 1961. Sadia Transportes Aéreos joined the service in 1968. Between 1975 and 1992, it was operated exclusively by Varig's Lockheed L-188 Electra which for the sake of neutrality did not have the Varig name on the fuselage.
On 19 December 1959, Varig started to fly their new 35-seat Sud Aviation SE-210 Caravelle I between Brazil and New York–Idlewild, stopping at Belem, Trinidad and Nassau; on 2 July 1960, the Caravelles were replaced by the Boeing 707-441, which could fly from Rio de Janeiro–Galeão to New York–Idlewild nonstop. The Caravelles were switched to operate trunk routes within Brazil and to Buenos Aires–Ezeiza and Montevideo.
Between May and August 1961, after a lengthy battle for the Brazilian market, Varig took over the Consortium Real-Aerovias-Nacional, which was in serious economic difficulty. This purchase not only made Varig the largest airline in South America but also granted rights to other cities in Latin America, Miami, the West Coast of the United States and to Japan.
European services started on 10 February 1965. Varig had been lobbying for European concessions for more than ten years, but after the sudden shutdown of Panair do Brasil by the Brazilian military government, Varig was granted rights previously held by Panair and was ordered to immediately operate all scheduled services, including Panair's flight scheduled to depart that very night from Rio de Janeiro–Galeão to Recife, Lisbon, Paris–Orly and Frankfurt.
Varig also inherited Panair's two Douglas DC-8-33 and the agreement with TAP-Transportes Aéreos Portugueses to operate the Voo da amizade (English: Friendship Flight) between São Paulo–Congonhas, Rio de Janeiro–Galeão and Lisbon, with stops in Recife and Sal, now using Varig's Lockheed L-188 Electra. Originally started on 30 November 1960 by Panair and TAP, only Brazilian and Portuguese citizens or foreigners with permanent residence in Brazil or Portugal were entitled to the purchase of tickets for these flights, which were extremely popular due to their low fares. Those flights operated until 1967.
On 14 December 1966, Rubem Berta died of a heart attack. The following day, the administrative board elected Erik Oswaldo Kastrup de Carvalho, Berta's right-hand and former Panair employee, as Varig's fourth director-president.
The 1973 oil crisis brought to Varig the need to replace its older-generation aircraft with newer ones. For international flights, the chosen type was the Douglas DC-10, which had its first flight with Varig on 1 July 1974, and this aircraft had the range to serve European destinations including Paris without a refuelling stop en route. In the domestic arena, gradually the Boeing 737-200 became the work-horse.