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 not fulfilling membership pre-requisites, and on , the IATA code RG and the callsign Varig officially ceased to exist. As a result of accumulated debts, on , at the request of the airline administrator, the 1st Business Court of Rio de Janeiro declared Flex bankrupt and initiated the process of liquidation. However, on September 10, the bankruptcy process was suspended at the request of Ruben Berta Foundation and the company returned in practical terms to recovery order status until the validity of the bankruptcy is judged. VRG Linhas Aéreas S/A was fully integrated in Gol Airlines. On , the "new"