Brazilian cargo airline VarigLog's announced plan to shutdown all European operations for "economic and operational" reasons indicates plainly the difficulty of operating in an area known for high costs and stringent noise and environmental regulations.

In a terse statement to customers this week, the airline said it would soon close its offices in Spain, Italy, and Germany. No other details were provided and the company could not be reached for comment.

At one time, the cargo airline was a wholly-owned subsidiary of the constant money-losing passenger airline Varig. VargiLog was sold for $48.2 million in 2006 to Volo do Brazil, a consortium that included Matlin Patterson and Brazilian investors Marco Antonio Audi, Marco Hapfel and Luiz Gallo.

VarigLog is rated No. 48 in Air Cargo World's Top 50 airlines. The carrier posted 864,000 freight tonne kilometers in 2007, a 29.6 percent drop over the earlier year due to the folding of the passenger carrier Varig.

São Paulo-based VarigLog, which has a fleet of 18 aircraft, operates domestic freight services to several destinations within Brazil, including capital city Brasilia and Campinas.

Robert W. Moorman