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Comparing TP At LIS To OS At VIE And AY At HEL  
User currently offlineDocpepz From Singapore, joined May 2001, 1971 posts, RR: 3
Posted (5 years 5 months 2 weeks 4 days 23 hours ago) and read 4124 times:

Hi everyone

I was just reading that Nokia made up 75% of the Finnish stock exchange and is probably Finland's biggest export (brandwise at least).... AY and HEL are functioning quite well in that top corner of Europe, despite there being competition from secondary hubs like CPH, and larger ones like CDG and LHR to the South. Does Nokia play a big role in AY's intercontinental and transfer routes?

This got me thinking about other smaller "niche" hub players in other parts of Europe. We have Vienna and OS - OS has an extensive Eastern European network (a lot of the former colonies were there), but OS has a problem in the sense that Vienna is at the extreme east of Austria, with other parts of Australia like Salzburg better served ex MUC. And with borderless travel throughout the EU, it's easier for people west of VIE to go to MUC instead.

However, despite OS and VIE's extensive links to Eastern Europe, it didn't prevent OS from being swallowed by LH.

Now what about TAP and Lisbon? The way HEL is located on top of Europe and VIE is located at the extreme east of Vienna, Lisbon is located as about far South and West as you could get in Europe.

TP has extensive links to Brazil (much due to the colonial heritage) but its long haul network beyond Brazil is minimal. Is drawing comparisons between TP in LIS and AY in HEL fair? Could Lisbon develop to be a mini niche hub such as Helsinki or even Vienna?

How has AY resisted being taken over by bigger oneworld airlines, while remaining somewhat profitable? TP made a loss of over EUR200 million last FY I believe.Is there a chance that TP could go the route of OS and get swallowed by a larger airline in Europe, and could LIS actually develop to be a viable "niche" hub between say South America and Europe?

I know much of that depends on TP..... So where do you guys think TP is headed over the short to medium term, and are their schedules conducive for connecting traffic from Africa/S America to other parts of Europe?

20 replies: All unread, jump to last
 
User currently offlineDirkou From United States of America, joined Jun 2003, 571 posts, RR: 0
Reply 1, posted (5 years 5 months 2 weeks 4 days 19 hours ago) and read 4077 times:

TAP is mostly an ethnic company serving the Portuguese communities abroad. Their strategy of growing in Brazil by any means is falling apart with a EUR 280 million loss last year. There is no high yield demand for almost all the destinations they have in Brazil (except GRU and GIG).

In my opinion they can only survive with no more than 30 aircraft and being owned by Iberia. Lufthansa is not interested in TAP (which has a total accumulated debt of over 1500 Million EUR). Also they can't do anything with their Lisbon "hub", a small chaotic airport.

I would give TAP a 2 to 3 years life (at least the TAP as know it now).


User currently offlinePyh From Finland, joined Oct 2001, 146 posts, RR: 0
Reply 2, posted (5 years 5 months 2 weeks 4 days 17 hours ago) and read 4046 times:



Quoting Docpepz (Thread starter):
How has AY resisted being taken over by bigger oneworld airlines, while remaining somewhat profitable?

Because it is 55,8% state-owned and there are no plans to change that at least during this government period.


User currently offlineAustrianZRH From Austria, joined Aug 2007, 1385 posts, RR: 0
Reply 3, posted (5 years 5 months 2 weeks 4 days 16 hours ago) and read 4003 times:



Quoting Docpepz (Thread starter):
with other parts of Australia like Salzburg better served ex MUC.

I'd say, those parts are better served from SYD, MEL, PER, BNE, ADL or DRW Big grin  Wink.

Jokes aside, OS being swallowed by LH is IMHO not caused by the location of the hub, or despite the location of the hub, but simply by an incompetent management.



WARNING! The post above should be taken with a grain of salt! Furthermore, it may be slightly biased towards A.
User currently offlineOHLHD From Finland, joined Dec 2004, 3962 posts, RR: 25
Reply 4, posted (5 years 5 months 2 weeks 4 days 15 hours ago) and read 3982 times:



Quoting Docpepz (Thread starter):
with other parts of Australia like Salzburg

Well, we got no kangaroos over here. Big grin

Quoting Docpepz (Thread starter):
(a lot of the former colonies were there),

Small correction, those where no colonies but territories as it was a giant empire ruled by Austria.

Quoting Docpepz (Thread starter):
Does Nokia play a big role in AY's intercontinental and transfer routes?

AFAIK The India routes were opened " because" of Nokia. They have a giant plant there and you find more Nokia mobiles in India then anywhere else.

Quoting Docpepz (Thread starter):
it didn't prevent OS from being swallowed by LH.

Well, until now it is not done and I would not say swallod but simply asked LH to get bought.  Smile

Quoting Docpepz (Thread starter):
How has AY resisted being taken over by bigger oneworld airlines, while remaining somewhat profitable?

Remeining profitable at what cost? Hundrets of employees have lost their jobs over the years with AY. But honestly who could by AY?


User currently offlineAirbazar From United States of America, joined Sep 2003, 8380 posts, RR: 10
Reply 5, posted (5 years 5 months 2 weeks 4 days 8 hours ago) and read 3822 times:



Quoting Docpepz (Thread starter):
Now what about TAP and Lisbon? The way HEL is located on top of Europe and VIE is located at the extreme east of Vienna, Lisbon is located as about far South and West as you could get in Europe.

Which makes a great secondary hub for S.America and Africa, two regions with great potential for future growth. AY and OS however, have no niche market to speak of and are competing on markets such as Asia/Middle East where the competition is very tought.

Quoting Dirkou (Reply 1):
TAP is mostly an ethnic company serving the Portuguese communities abroad.

That's an antiquated view of TP. If that was truly the case they would be serving Boston and Toronto but they don't. Nearly 60% of all tickets sold by TP are outside of Portugal. Even with a crappy airport they do a sizable connecting business to their Brazil and African destinations. They're an ethnic airline in a sense that they target specific markets where they can succeed: LAD because of the ties between Angola and Portugal which allows them to be the only carrier with daily flights; Brazil because of the ties between Brazil and Portugal which allows them to have more frequencies than any other European country; and yes, obviously places like EWR because of the large Portuguese community and business interests in the NJ area.
I think the difference between these 3 carriers is their place in the market. As I said above, unlike AY and OS, TAP has a very healthy and growing niche market that neither of the other 2 carriers have, and neither of the large super carriers of Europe are willing or able to venture into. There's no way in hell that the Brazilian government is going to give LH/AF/BA 60 weekly frequencies, or that the Angolan government is going to give these same carriers 7-10 weekly frequencies.


User currently offline2travel2know From Panama, joined Apr 2005, 3580 posts, RR: 4
Reply 6, posted (5 years 5 months 2 weeks 4 days 7 hours ago) and read 3783 times:

It would be best to only compare TP/LIS with AY/HEL, as both airlines/hubs are located at the extremes of the European continent and both airlines must have good long-haul destiantions to feed their other-wise weak European flights.
AY depends a lot on the economy of their Scandinavian/Baltic, former URSS and Asian destinations. The Finnes did a good job of turning Vantaa into a world class hub and having mighty Nokia come from the same country gives Finnair some advantages.
TP build itself mostly as an ethnic airline for the Portuguese speaking world, that might not be the case now, but Portugal historic ties with Brazil and Angola does give TP an strategic advantage over other airlines flying to Brazil and Angola. Regardless of how nice TP looks, it keeps loosing money, which shouldn't be blamed on flying to plenty (still not enough for me) Brazilian destinations or how bad LIS airport is compared to neighbouring airports. Even with LIS faults, if TP would try to run a more efficient hub operation with aircraft commonality, adding more destinations, routes like year-around LIS-YYZ and LIS-PVD would be profitable.



I don't work for COPA Airlines!
User currently offlineDirkou From United States of America, joined Jun 2003, 571 posts, RR: 0
Reply 7, posted (5 years 5 months 2 weeks 4 days 6 hours ago) and read 3723 times:

>Nearly 60% of all tickets sold by TP are outside of Portugal.

And more than 50% by Portuguese communities which make them an ethnic company.

>LIS-YYZ and LIS-PVD would be profitable.

Which makes it an even more ethnic company. And sorry but those routes are more of the same - low yield traffic.

>flying to plenty (still not enough for me) Brazilian destinations

Are referring to Brasilia/Belo Horizonte having a less than 50% average occupation? And having to do loop flights like LIS-NTL-FLZ-LIS to increase the pax number per flight?

TAP's strategy s wrong and the 280 Million EUR loss shows it all.
There is no market for 16 long haul aircraft and LIS should never be a hub. It is too small.


User currently offlineAndaman From , joined Dec 1969, posts, RR:
Reply 8, posted (5 years 5 months 2 weeks 4 days 4 hours ago) and read 3655 times:



Quoting Docpepz (Thread starter):
How has AY resisted being taken over by bigger oneworld airlines, while remaining somewhat profitable?

Luckily AY have been a well run company and they have been ready to take risks, like using HEL's geographical position for the quick Europe-Asia connections. And with Asia they survive or fall, the next 12 months will tell a lot, thats what they say themselves. They have been investing a lot to build a modern fleet and also HEL is expanding, the future will tell how they survive on the markets.


User currently offline2travel2know From Panama, joined Apr 2005, 3580 posts, RR: 4
Reply 9, posted (5 years 5 months 2 weeks 4 days 4 hours ago) and read 3643 times:



Quoting Dirkou (Reply 7):
>Nearly 60% of all tickets sold by TP are outside of Portugal.

And more than 50% by Portuguese communities which make them an ethnic company.

>LIS-YYZ and LIS-PVD would be profitable.

Which makes it an even more ethnic company. And sorry but those routes are more of the same - low yield traffic.

>flying to plenty (still not enough for me) Brazilian destinations

Are referring to Brasilia/Belo Horizonte having a less than 50% average occupation? And having to do loop flights like LIS-NTL-FLZ-LIS to increase the pax number per flight?

TAP's strategy s wrong and the 280 Million EUR loss shows it all.

IB is pretty much ethnic travel too and they seem to do well on their Latinamerican routes and connections for those in MAD. Why IB can while TP which do have a similar model can't?



I don't work for COPA Airlines!
User currently offlineAndaman From , joined Dec 1969, posts, RR:
Reply 10, posted (5 years 5 months 2 weeks 4 days 4 hours ago) and read 3631 times:



Quoting Docpepz (Thread starter):
Does Nokia play a big role in AY's intercontinental and transfer routes?



Quoting OHLHD (Reply 4):
AFAIK The India routes were opened " because" of Nokia. They have a giant plant there and you find more Nokia mobiles in India then anywhere else.

Yes I've understood Nokia is/has been the largest foreign company in India, but an airline hardly can rely on one company when planning their routes.


User currently offlineAntonioavelar From Portugal, joined Jan 2005, 20 posts, RR: 0
Reply 11, posted (5 years 5 months 2 weeks 4 days 4 hours ago) and read 3625 times:



Quoting Dirkou (Reply 7):
Are referring to Brasilia/Belo Horizonte having a less than 50% average occupation? And having to do loop flights like LIS-NTL-FLZ-LIS to increase the pax number per flight?

You mean NAT and FOR, right? The loop flights are not seldom. They've been taking place in the low season for some years now. And as it's been previously said, the equipment change form an A310 with capacity for 198 pax to an A330 with capacity for at least more 65 pax (what translates a 33% increase in seating capacity) makes it not that serious to display the '50% -' load factors you claim. Personally, I find it quite hard to be that low...I'd bet they're around 60%.

Quoting Dirkou (Reply 7):
TAP's strategy s wrong and the 280 Million EUR loss shows it all.
There is no market for 16 long haul aircraft and LIS should never be a hub. It is too small.

Of course there is market for TAP to operate 16 long haul a/c. I only regret the fact that TAP hasn't payed much attention to emerging markets (not that emerging by now with the global recession, but still...) like Asia or the Middle East. They could easily buil a solid network eastbound, in India or China for instance, and they've got enough aircraft and resourses to make it happen with right now. It would not be a mistake even to lease another pair of A330's to cover new long haul markets, but it certainly is not a good timming to launch new routes inside the US, even if the whole population decides to move to PVD or BOS. LIS is not helping as well. Only if we had a bigger airport or at least some more competitive conditions to cope with today's needs...everything would be different.

As for the 280 Million EUR loss, it does not just reflect the strategy adopted by the airline in the last finnancial year (not that wrong...if they managed to pull TAP out of the air transport recession around 2001, they can do it again), but it represents a big share of other problems that it could not control. PGA's acquisition was not a mistake, neither were the flight schedules or fleet management, but there are certainly some structural problems (concerning the workers) that the management team cannot deal with anymore, and it is affecting TP's performance, but not in a life-threatening level yet.


User currently offlineThestooges From , joined Dec 1969, posts, RR:
Reply 12, posted (5 years 5 months 2 weeks 4 days 3 hours ago) and read 3615 times:



Quoting 2travel2know (Reply 9):
IB is pretty much ethnic travel too and they seem to do well on their Latinamerican routes and connections for those in MAD. Why IB can while TP which do have a similar model can't?

I think it has to do with the size of the markets, TAP is the link between Portugal with 10 million people and Brazil with 190 million people, whereas Iberia is the link between Spain with 40 million people and Spanish speaking Latin America with roughly 370 million people.

The model does differ in that Iberia also flies to Brazil (GRU and GIG), but TAP only flies to Brazil. In some ways it might have been better for them to have expanded to places like Buenos Aires, Santiago, and Lima instead of Brasilia, Belo Horizonte and Salvador.


User currently offline2travel2know From Panama, joined Apr 2005, 3580 posts, RR: 4
Reply 13, posted (5 years 5 months 2 weeks 4 days 3 hours ago) and read 3589 times:



Quoting Thestooges (Reply 12):
The model does differ in that Iberia also flies to Brazil (GRU and GIG), but TAP only flies to Brazil. In some ways it might have been better for them to have expanded to places like Buenos Aires, Santiago, and Lima instead of Brasilia, Belo Horizonte and Salvador.

TP flies to CCS and it has been seen in CUR. Yes I agree, TP should have looked to expand in Latinamerica too; EZE, SCL, MVD could have been profitable markets for them via a Brazilian city.



I don't work for COPA Airlines!
User currently offlineMAH4546 From Sweden, joined Jan 2001, 32789 posts, RR: 72
Reply 14, posted (5 years 5 months 2 weeks 4 days 3 hours ago) and read 3574 times:



Quoting 2travel2know (Reply 9):
IB is pretty much ethnic travel too and they seem to do well on their Latinamerican routes and connections for those in MAD. Why IB can while TP which do have a similar model can't?

Because there is sizeable premium demand between Spain and South America that does not exist between Portugal and Brazil outside of GRU/GIG.



a.
User currently offlineThestooges From , joined Dec 1969, posts, RR:
Reply 15, posted (5 years 5 months 2 weeks 4 days 2 hours ago) and read 3547 times:



Quoting 2travel2know (Reply 13):
TP flies to CCS

Only once a week I think, so definitely nothing major, and thats only because there's a sizeable Portuguese population there.


User currently offlineMAH4546 From Sweden, joined Jan 2001, 32789 posts, RR: 72
Reply 16, posted (5 years 5 months 2 weeks 4 days 2 hours ago) and read 3532 times:



Quoting Thestooges (Reply 15):

Quoting 2travel2know (Reply 13):
TP flies to CCS

Only once a week I think, so definitely nothing major, and thats only because there's a sizeable Portuguese population there.

Fives times a week - 2w LIS, 2w FNC, 1w OPO.



a.
User currently offlineAirbazar From United States of America, joined Sep 2003, 8380 posts, RR: 10
Reply 17, posted (5 years 5 months 2 weeks 3 days 11 hours ago) and read 3399 times:



Quoting Thestooges (Reply 12):
I think it has to do with the size of the markets, TAP is the link between Portugal with 10 million people and Brazil with 190 million people, whereas Iberia is the link between Spain with 40 million people and Spanish speaking Latin America with roughly 370 million people.

But what percentage of that population actually flies TATL? That's the important number. Brazil is the economic power of South and Central America. You could combine the economies of Argentina, Chile, and Venezuela together and it still wouldn't come close to being as big as Brazil. One only has to look at the number of daily flights from GRU/GIG to Europe, versus those from EZE, SCL, and CCS.

Quoting 2travel2know (Reply 13):
TP flies to CCS and it has been seen in CUR. Yes I agree, TP should have looked to expand in Latinamerica too; EZE, SCL, MVD could have been profitable markets for them via a Brazilian city.

They already "serve" EZE with code-share with TAM, twice daily via BSB and GRU. Code-sharing is far more efficient than a add-on route because it doesn't require a second aircraft. Anything further than Brazil would require a 2 aircraft operation which would be very costly in markets where premium demand is very limited or non-existent, and especially for a small carrier like TP. Code-sharing also allows them to test the market before venturing in with their own aircraft.


User currently offlineRafabozzolla From Brazil, joined Apr 2000, 1229 posts, RR: 0
Reply 18, posted (5 years 5 months 2 weeks 3 days 10 hours ago) and read 3366 times:



Quoting Dirkou (Reply 1):
I would give TAP a 2 to 3 years life (at least the TAP as know it now)

For how many years have you been giving TAP 2 to 3 years life?


User currently offlineSflaflight From United States of America, joined Nov 2005, 1183 posts, RR: 1
Reply 19, posted (5 years 5 months 2 weeks 2 days 13 hours ago) and read 3158 times:

That is the case with many ''corner'' hubs. Those hubs tend to have to focus on distant long haul and extreme short haul. LIS and HEL and VIE in the EU function quite like MIA and BOS and SEA and to a certain extend LAX (connection wise, obviously LAX is an O&D market) in the US. All those cities offer poor and limited connections domestically, so they are forced to become international hubs. MIA is MIA because of its position and closeness to the Caribbean and South American and that has worked well for it, much in the same way as LIS and MAD function. But those markets also domestic connection for very short haul connections, in the case of MIA to smaller cities in Florida and the Bahamas, BOS to small New England/Maine cities and SEA to small NW cities. Parallels can also be found in the same manner in the EU.

User currently offlineAidanoc5793 From Ireland, joined Apr 2009, 105 posts, RR: 0
Reply 20, posted (5 years 5 months 2 weeks 2 days 12 hours ago) and read 3114 times:

hey! Nokia while being a major contributer to the finnish economy has little to do with its passengers, AY and HEL provide good connections from Asia to Europe and now the US and vica-versa, its convienient connections from sweden, norway, denmark are a credible alternative to SK and TG in CPH and ARN for scandinavian passengers, and HEL is a top class airport, this combination is not easily held eg. BRU one of the worlds best does not have a top class airline to match it. AY also serve most major european cities and again offer excellent connections with good safe service.
VIE is probably one of the most unique airports in Europe. It is small and its connection times are some of the fastest. It also has a variety of connections that a lot of other airports don't such as daily flights to taipei. Domestic connections fuel a lot of VIE's traffic, yes it is in very east of Austria but OS meets this challenge perfectly, frequent flights from all corners of the country and when it comes to making a decesion between a direct LH flight with rock hard cheese sandwiches and a fast connection with OS at VIE with amazing flight catering, what would you choose?. VIE's location gives it access to eastern europe, prague, bratislava all in a few hours drive. OS is in bad way at the moment but it manages to keep its passengers and keep more coming through VIE. Its excellent in-flight service and connections to airports in regional eastern europe serve a very unique network of pax.
LIS is a busy little airport and is a lot like DUB; both are in a complete mess, hectic and over crwoded but yet both have the potential to be major european hubs. TP has a very good network from LIS but many people making connections at LIS for south america want to fly to GRU or GIG not places where nobody has heard of, also TP operates many one stop flights which are not attractive for transfer pax
sorry for this being so long...and any arguements to what i have said welcome


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