Air Transport World

Varig lays groundwork for continuation of winning ways. (includes related articles)

Varig lays groundwork for continuation of winning ways

In this sixtieth year of Varig Brazilian Airlines' existence, following a year that the carrier's executives have described as anything from "excellent' to "spectacular,' the old and the new mingle comfortably as the airline prepares for yet another banner year.

The largest Lockheed Electra turboprop passenger-aircraft fleet in the world works in harness here with Boeing 747-300 Combis and 767-200s, along with McDonnell Douglas DC-10-30s, Airbus Industrie A300B4s, Boeing 727-100s, 737-200s and venerable 707-320s.

The old and the new are also working in harness in terms of management personnel. Following establishment by Brazil's airlines of AERUS, a liberal, industry-wide pension plan that supplements the rather skimpy national pension system and permits retirement as early as age 58, many employes are now opting for retirement. When added to those executive approaching Varig's mandatory retirement age of 65, the shock to the system is considerable. This year some 800-900 employes of Varig and its sister company, Cruzeiro do Sol, will retire, including many from upper- and middle-management levels. In addition 57 pilots will reach the mandatory grounding age of 60.

Varig has long been a favorite employer in Brazil, due largely to its enlightened social policies (see the sidebar about the Ruben Berta Foundation). As a result there had been little turnover in managerial ranks. But now it is necessary to train a second generation to take up the reins that are being relinquished by the retiring veterans.

Helio Smidt, Varig's president (recently re-elected to a second five-year term), has organized a three-prong attack on the problem:

An aggressive hiring program, both to replace retirees and to increase staffing in order to further improve Varig's already excellent service. In 1986 employment was increased by 1,000, reaching 18,000 for Varig and 3,000 for Cruzeiro in Brazil, and another 2,000 for Varig abroad. Some 500 are expected to be hired this year.

A "mentor' program, under which executives are grooming one or more successors. For example, VP Rubel Thomas recently turned over one of his responsibilities, that of commercial director, to new commercial director Raul de Medeiros. (The Varig title of VP corresponds more or less to U.S. executive or senior VP; the airline has two VPs. The title of director corresponds to a U.S. VP.)

An extensive training program covering all levels and divisions. The program is coordinated and administered by the Directorate of Human Resources, whose recent elevation from a "superintendencia' to a "directoria'--a major division--indicates the importance Varig attaches to the expanded training of administrative executives and personnel. The directorate is headed by Walterson F. Caravajal, who came to Varig from AERUS.

The last couple of years, and especially 1986, saw a remarkable turnaround in Varig's fortunes and indeed in Brazil's. The credit is given to the Crusado Economic Stabilization Plan introduced in February 1986 by Brazil's President Jose Sarney in order to tame the nation's triple-digit inflation and help manage its huge external debt. The currency was restructured, with the cruzeiro replaced by a new unit, the cruzado, at the rate of 1,000 cruzeiros to one cruzado. …

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