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 Flight 254 (270°). The Boeing 737 was not equipped with INS, using only automatic direction finders (ADF) and VOR. Months after the accident, the flight plan VARIG 254 used was shown to 21 pilots of major airlines in the world during a test conducted by the International Federation of Air Line Pilots' Associations (IFALPA). No fewer than 15 pilots committed the same mistake that the VARIG flight 254 crew had made. After the flight 254 accident, VARIG would install Omega navigation systems in their aircraft. Also, there were several contributing factors to the accident: the pilot did not realise he should be