The auction of Varig's assets (ATWOnline, May 22) has been moved forward from July 9 to today in what JP Morgan considers "a last-ditch attempt to raise cash to avoid further aircraft confiscation."Separately, a judge presiding over the airline's US bankruptcy reorganization "extended his injunction barring seizure of company aircraft until June 13," according to Merrill Lynch.

Today's auction has been opened to any and all interested parties with no pre-qualification required, JP Morgan stated. Also, according to the same source, "Varig routes and slots that have been abandoned in the last 30 days will not be recovered, but rather passed on to incumbent operators." This eliminates any incentive for potential buyers such as Gol or TAM to bid as they are likely to pick up the assets for free, or for far less money, if Varig dissolves, the firm suggested.

Currently, the minimum bid for the airline's domestic operations is $700 million, while $800 million is the minimum for both domestic and international operations. However, the minimum will be lifted after the first round of bids, suggesting that Varig will go for considerably less if it is bought intact. JP Morgan estimates the carrier is operating at "roughly half" its 2005 capacity levels.