Varig services to Varig. Year-long discussions to merge Varig with TAM Airlines ended unsuccessfully in 2004 and the same year Varig fell to third place in the Brazilian domestic market share, behind TAM and Gol. VARIG applied to the Commercial Bankruptcy and Reorganization Court in Rio de Janeiro on , for the commencement of "judicial reorganization" proceedings pursuant to the New Bankruptcy and Restructuring Law of Brazil (Law 11.101). The request was granted on 22 June 2005. VARIG continued to provide services despite its financial troubles. In order to raise funds, the Bankruptcy and Reorganization Court decided to sell two of
Varig Embraer. The administration of Ozires Silva, which lasted for only 2.5 years, started with major restructuring in the company, aiming at making Ruben Berta Foundation more powerful and the President-Director weaker. Also, on , all cargo operations were united under a new airline named VarigLog. Even so, the airline presented at the end of the year, for the first time in its history Exposed Net Assets of BRL148.6 million - that is, the amount of debits was greater than the amount of credits and assets. One year later, it would reach BRL523 million. In 2001, Varig saw the birth of