The crisis enveloping Brazil’s struggling flagship airline Varig SA appears to be worsening as it fails to meet agreements for basic operating payments, DowJones news wire is reporting. In the midst of a cash crunch and with no access to credit, the company - currently in the restructuring phase of bankruptcy proceedings - failed to pay maintenance and airport bills on time, breaking agreements made earlier this year.

Varig President Marcelo Bottini said Wednesday that the company is renegotiating payments for the second half of the year and that the airline won’t stop operations.
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