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airbazar
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Re: TAP Air Portugal's post COVID-19 crisis

Wed May 27, 2020 12:26 pm

abrelosojos wrote:
Kikko19 wrote:
I saw loaded also CUN for the autumn, hopefully no second wave coming :D


= I just looked this up, and it is an extremely smart schedule.

LIS (2355) - CUN (0605+1)
CUN (1530) - LIS (0530+1)

Seems like it allows their entire 60+ city European network to have the latest departure out of Europe, and arrive in CUN for full day of vacation, and 1 night less of hotel. Flight is also perfectly timed for hotel check-out times.

I think this would be the only European airline arriving red-eye into CUN.

Smart move.

Saludos,
Alex


It's ironic that this ultra leisure route would be the only(?) TATL route that is a red-eye in both directions when common a.net wisdom always said that business fliers are the ones that prefer red-eyes. I have always disagreed with this theory by the way. In my opinion the red-eyes exist in order to maximize the connectivity at an airline's hub, not because they are the preferred choice of business fliers.
 
Kikko19
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Re: TAP Air Portugal's post COVID-19 crisis

Thu May 28, 2020 7:32 am

airbazar wrote:
abrelosojos wrote:
Kikko19 wrote:
I saw loaded also CUN for the autumn, hopefully no second wave coming :D


= I just looked this up, and it is an extremely smart schedule.

LIS (2355) - CUN (0605+1)
CUN (1530) - LIS (0530+1)

Seems like it allows their entire 60+ city European network to have the latest departure out of Europe, and arrive in CUN for full day of vacation, and 1 night less of hotel. Flight is also perfectly timed for hotel check-out times.

I think this would be the only European airline arriving red-eye into CUN.

Smart move.

Saludos,
Alex


It's ironic that this ultra leisure route would be the only(?) TATL route that is a red-eye in both directions when common a.net wisdom always said that business fliers are the ones that prefer red-eyes. I have always disagreed with this theory by the way. In my opinion the red-eyes exist in order to maximize the connectivity at an airline's hub, not because they are the preferred choice of business fliers.


a339? it's doable, family of 4 either all in the center or 2+2 I've used TP a339 to SSA and was great experience (apart from initial humidification of the cabin that felt cold). I guess lot of Spanish, Italians and maybe French will like this route.
 
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sergegva
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Re: TAP Air Portugal's post COVID-19 crisis

Mon Jun 08, 2020 6:47 pm

I have noticed that most TAP flights are still closed to booking on the FlyTAP website, such as flights from Geneva and Zurich. However, these are supposed to resume on July 1st.. What is surprising is that they are sold by several travel agencies, but not directly by TAP... Does anyone have any information about this? It's rather worrying for them...
 
abrelosojos
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Re: TAP Air Portugal's post COVID-19 crisis

Thu Jun 11, 2020 2:20 pm

sergegva wrote:
I have noticed that most TAP flights are still closed to booking on the FlyTAP website, such as flights from Geneva and Zurich. However, these are supposed to resume on July 1st.. What is surprising is that they are sold by several travel agencies, but not directly by TAP... Does anyone have any information about this? It's rather worrying for them...


= Strange. I went to their site, and can clearly see both ZRH-LIS and GVA-LIS bookable. BTW, why use a travel agency in 2020?

Saludos,
Alex
Live, and let live.
 
Westerwaelder
Posts: 224
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Re: TAP Air Portugal's post COVID-19 crisis

Thu Jun 11, 2020 4:19 pm

airbazar wrote:
abrelosojos wrote:
Kikko19 wrote:
I saw loaded also CUN for the autumn, hopefully no second wave coming :D


= I just looked this up, and it is an extremely smart schedule.

LIS (2355) - CUN (0605+1)
CUN (1530) - LIS (0530+1)

Seems like it allows their entire 60+ city European network to have the latest departure out of Europe, and arrive in CUN for full day of vacation, and 1 night less of hotel. Flight is also perfectly timed for hotel check-out times.

I think this would be the only European airline arriving red-eye into CUN.

Smart move.

Saludos,
Alex


It's ironic that this ultra leisure route would be the only(?) TATL route that is a red-eye in both directions when common a.net wisdom always said that business fliers are the ones that prefer red-eyes. I have always disagreed with this theory by the way. In my opinion the red-eyes exist in order to maximize the connectivity at an airline's hub, not because they are the preferred choice of business fliers.


That might well be the case for US domestic flights. On longer longhaul routes such as South Africa to Europe or Europe to South America, most customers prefer overnight flights. They simply don't want to spend 10+ hours during the day on a plane. That goes for leisure as much as for business.
 
aviationlover7
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Re: TAP Air Portugal's post COVID-19 crisis

Thu Jun 18, 2020 6:17 pm

Any further updates on TAP's rescue package?
 
airbazar
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Re: TAP Air Portugal's post COVID-19 crisis

Fri Jun 19, 2020 12:19 pm

aviationlover7 wrote:
Any further updates on TAP's rescue package?

Yup. The EU has approved and the government has agreed to pump 1.2 billion Euro for now but it has asked for some concessions. Mostly they want to have more say in executive decisions. TAP will also have to submit a restructuring plan that mostly centers around reducing fleet size and employee numbers. IIRC, there should be more details on the restructuring by next week.
 
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mercure1
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Re: TAP post 1H 2019 loss; government pushes Neeleman to sell stake

Thu Jul 02, 2020 9:41 pm

Well looks like its done.
Neeleman(Atlantic Gateway) will cease being TAP shareholder giving state controlling stake in the airline in return for capital injection.

https://www.nytimes.com/reuters/2020/07 ... l-tap.html
https://www.reuters.com/article/us-heal ... SKBN2432YT
mercure f-wtcc
 
Kikko19
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Re: TAP post 1H 2019 loss; government pushes Neeleman to sell stake

Fri Jul 03, 2020 5:41 am

well (or necessarily) done! no alternatives around I guess.
capitalism is where profits are privatized and costs are socialized. Covid19 gave another proof of it.
 
a350lover
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Re: TAP post 1H 2019 loss; government pushes Neeleman to sell stake

Fri Jul 03, 2020 11:28 am

What's the possible outcome of TAP's nationalization? Do you them reorganizing the network?
 
cityshuttle
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Re: TAP post 1H 2019 loss; government pushes Neeleman to sell stake

Fri Jul 03, 2020 12:57 pm

According to a statement of the government, TAP shall continue to be run as a private company with no interaction of the government.

Therefore slight route adjustments due to COVID-19 may be possible, but I think they won’t necessarily skip half of their network once a new leadership is taking over.
 
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AECM
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Re: TAP post 1H 2019 loss; government pushes Neeleman to sell stake

Fri Jul 03, 2020 1:05 pm

The PT Government intend to contract an external company to hire a new independent and international management team. TAP will shrink in order to survive and grow again in the future.
 
kipfilet
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Re: TAP post 1H 2019 loss; government pushes Neeleman to sell stake

Fri Jul 03, 2020 2:02 pm

cityshuttle wrote:
According to a statement of the government, TAP shall continue to be run as a private company with no interaction of the government.

Therefore slight route adjustments due to COVID-19 may be possible, but I think they won’t necessarily skip half of their network once a new leadership is taking over.


Still they need to deal with the fallout from COVID in order to survive. They were close to insolvency (and that is why govt intervention was needed). I predict that the route network will shrink substantially.
 
aviationlover7
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Re: TAP Air Portugal's post COVID-19 crisis

Fri Jul 10, 2020 10:35 am

Now that David Neeleman is out, CEO Antonoaldo Neves sacked and the Portuguese Gov. has a majority stake, will TAP’s strategy change?
 
airbazar
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Re: TAP Air Portugal's post COVID-19 crisis

Fri Jul 10, 2020 11:28 am

aviationlover7 wrote:
Now that David Neeleman is out, CEO Antonaldo Neves sacked and the Portuguese Gov. has a majority stake, will TAP’s strategy change?

Unfortunately I see no other scenario. IMO they were on a really good path. This is bad news for all involved except a hand full of well connected people who will make millions out it. The tax payers will now have to continuously pump money into the airline. The government already warned that the 1.2 billion is only the first installment to keep the airline operating until the end of the year, which means more money is coming and as a government owned airline they can't seek money from capital markets. And if that happens the EU will force them to significantly cut routes like they did to LOT. I can't imagine that there are good airline executives out there that know the TATL market well, that are either available or willing to take the job and implement a long term strategy. Neeleman and Neves actually had skin in the game. They put up their own money. I hope I'm wrong but I just don't see a scenario where this airline is still operating in 3 years in a function other that a very basic route structure and very unprofitable.
 
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Polot
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Re: TAP Air Portugal's post COVID-19 crisis

Fri Jul 10, 2020 11:36 am

airbazar wrote:
aviationlover7 wrote:
Now that David Neeleman is out, CEO Antonaldo Neves sacked and the Portuguese Gov. has a majority stake, will TAP’s strategy change?
I hope I'm wrong but I just don't see a scenario where this airline is still operating in 3 years in a function other that a very basic route structure and very unprofitable.

Everything you mentioned was going to happen regardless thanks to covid. TAP may have been “on a really good path” but let’s not pretend they have been wildly profitable the past couple of years, and that was during a boom period. They have been on a “really exciting for Portugal/TAP fans but still needing work on getting consistently high profits” path.

There’s no way now TAP could continue on that same growth path without adjustment and expect be profitable. Neeleman (who it should be noted has a good track record of starting airlines, not turning around established ones, and has to focus on Breeze) and Neves are not magicians. Do you think Neeleman and Neves would commit to pouring billions of their own money into the airline instead of taxpayers as TAP navigates through this crisis? Neeleman is smart enough to know when to exit.
 
Kikko19
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Re: TAP Air Portugal's post COVID-19 crisis

Fri Jul 10, 2020 12:37 pm

Polot wrote:
airbazar wrote:
aviationlover7 wrote:
Now that David Neeleman is out, CEO Antonaldo Neves sacked and the Portuguese Gov. has a majority stake, will TAP’s strategy change?
I hope I'm wrong but I just don't see a scenario where this airline is still operating in 3 years in a function other that a very basic route structure and very unprofitable.

Everything you mentioned was going to happen regardless thanks to covid. TAP may have been “on a really good path” but let’s not pretend they have been wildly profitable the past couple of years, and that was during a boom period. They have been on a “really exciting for Portugal/TAP fans but still needing work on getting consistently high profits” path.

There’s no way now TAP could continue on that same growth path without adjustment and expect be profitable. Neeleman (who it should be noted has a good track record of starting airlines, not turning around established ones, and has to focus on Breeze) and Neves are not magicians. Do you think Neeleman and Neves would commit to pouring billions of their own money into the airline instead of taxpayers as TAP navigates through this crisis? Neeleman is smart enough to know when to exit.

most of airlines will fall or get nationalized (even with 'loans') so I don't see the fate different for TP or LH or UA... govts will protect and nationalize as much as they can. rich will get richer and poor poorer. that is what happens during crisis, capitalism or socialism.
 
2eng2efficient
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Re: TAP Air Portugal's post COVID-19 crisis

Fri Jul 10, 2020 3:07 pm

It looks like they have LIS-JFK loaded for December, now using an A321LR.

Unbelievably cheap RT fares to Europe right now, but far too much uncertainty for me to pull the trigger, sadly.
 
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mercure1
Topic Author
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Re: TAP post 1H 2019 loss; government pushes Neeleman to sell stake

Fri Jul 10, 2020 3:25 pm

In Brazilian regulatory filing Azul states it netted equivalent of USD$12.2mil for its 6% stake in TAP. Part of deal Azul will not exercise right to convert 90 million euros worth of bonds into equity.
mercure f-wtcc
 
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fidelidade
Posts: 64
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TAP Changes Rumor

Wed Jul 15, 2020 6:17 pm

Here is what people are telling me at TAP. What do we think?

1) For destinations: AGA, SCQ, PDL-YYZ, TLV, and DME have all moved to May 2021
2) For fleet: Rapid exit of ATR's and 320-ceos; heavy reliance on E90/E95
3) For product: New Premium Economy in the works across network, including all European segments. In Europe, it will be Y+ and Y; long haul will have J, Y+, and Y
4) For management: Antonaldo Neves (CEO) and Rafael Quintas (CFO) are out. Ramiro Saquiero (COO) is apparently leaving for Aegean Airlines. Arik De (CCO) is leaving for Air Canada

I think some of them are inevitable, but really sad if true at the management level. They are 4 big names, and TAP will struggle filling these names. Of course, anyone can get a B-grade airline person laid off. Too bad, we have no real Portuguese talent here.
 
a350lover
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Re: TAP Changes Rumor

Wed Jul 15, 2020 6:27 pm

fidelidade wrote:
Here is what people are telling me at TAP. What do we think?
1) For destinations: AGA, SCQ, PDL-YYZ, TLV, and DME have all moved to May 2021
2) For fleet: Rapid exit of ATR's and 320-ceos; heavy reliance on E90/E95
3) For product: New Premium Economy in the works across network, including all European segments. In Europe, it will be Y+ and Y; long haul will have J, Y+, and Y


I wonder if "just" that is enough for beating the covid tsunami...
 
Ishrion
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Re: TAP Changes Rumor

Wed Jul 15, 2020 6:38 pm

fidelidade wrote:
Here is what people are telling me at TAP. What do we think?

1) For destinations: AGA, SCQ, PDL-YYZ, TLV, and DME have all moved to May 2021


The new LIS-CPT/CUN still on for this year?
 
CALMSP
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Re: TAP Changes Rumor

Wed Jul 15, 2020 6:55 pm

that would be quite the exit with your top 4 C-level all leaving.
 
abrelosojos
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Re: TAP Changes Rumor

Wed Jul 15, 2020 7:14 pm

CALMSP wrote:
that would be quite the exit with your top 4 C-level all leaving.


= Well, the government fired the CEO on national TV. Does not bode well for top talent to keep staying does it? I have heard mixed things about Ramiro, but Rafael is very very good. Last year, he won the best airline CFO award globally, and is balanced and a pair of safe hands. He also was key to do the debt restructuring for TAP before COVID. I have said this on the forum before. Also, Arik is truly one of the next generation airline leaders out there. It would be a pity if he was to leave just when TAP needed to perform a restructuring plan. Not surprised though. He is Canadian and former WestJet. Air Canada could benefit from some non-stale thinking to shake things out.

Saludos,
Alex
Live, and let live.
 
tobsw
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Re: TAP Changes Rumor

Wed Jul 15, 2020 7:18 pm

TAP has been (re)nationalised. One condition, management has to leave.
 
Sdmccray1984
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Re: TAP Changes Rumor

Wed Jul 15, 2020 7:32 pm

Back in May(2020), I booked a TAP flight for February 2021 round trip JFK-LIS. At that point, the website said that the equipment would be an A330-900neo(which I flew on in February). A few days ago, TAP canceled that flight & downgraded the equipment to an A321LR. NYC is one of the most prestigious routes out of Lisboa. So if demand is dropping so much that TAP would do that, I wonder if the flight will even exist at all by next February...
 
Sdmccray1984
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Re: TAP Changes Rumor

Wed Jul 15, 2020 7:32 pm

Back in May(2020), I booked a TAP flight for February 2021 round trip JFK-LIS. At that point, the website said that the equipment would be an A330-900neo(which I flew on in February). A few days ago, TAP canceled that flight & downgraded the equipment to an A321LR. NYC is one of the most prestigious routes out of Lisboa. So if demand is dropping so much that TAP would do that, I wonder if the flight will even exist at all by next February...
 
NYCSKYGUY
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Re: TAP Changes Rumor

Wed Jul 15, 2020 7:35 pm

Sdmccray1984 wrote:
Back in May(2020), I booked a TAP flight for February 2021 round trip JFK-LIS. At that point, the website said that the equipment would be an A330-900neo(which I flew on in February). A few days ago, TAP canceled that flight & downgraded the equipment to an A321LR. NYC is one of the most prestigious routes out of Lisboa. So if demand is dropping so much that TAP would do that, I wonder if the flight will even exist at all by next February...


The 321LR is really optimal for that flight. Why not use it? It has the range, and most likely the capacity at this point. Probably costs 1/2 the amount to operate (just a guess). Smart move TAP.
 
abrelosojos
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Re: TAP Changes Rumor

Wed Jul 15, 2020 7:47 pm

NYCSKYGUY wrote:
Sdmccray1984 wrote:
Back in May(2020), I booked a TAP flight for February 2021 round trip JFK-LIS. At that point, the website said that the equipment would be an A330-900neo(which I flew on in February). A few days ago, TAP canceled that flight & downgraded the equipment to an A321LR. NYC is one of the most prestigious routes out of Lisboa. So if demand is dropping so much that TAP would do that, I wonder if the flight will even exist at all by next February...


The 321LR is really optimal for that flight. Why not use it? It has the range, and most likely the capacity at this point. Probably costs 1/2 the amount to operate (just a guess). Smart move TAP.


= Absolutely agree. I just looked at their schedule, and it seems they replaced a 339 with 2 321-LR. If you follow Arik's career, he is big on frequency;, and this is the right thing to do. Double frequency allows more connections at their LIS hub. Honestly, I am surprised they did not do this before. Too bad he is leaving for Air Canada.

Saludos,
Alex
Live, and let live.
 
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fidelidade
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Re: TAP Changes Rumor

Wed Jul 15, 2020 7:51 pm

I checked with my internal contact and it is exactly like what is said above. The network team has been told to use the LR as much as possible as apparently Arik wants to provide coverage to all places. In an internal video, he said he wants to fly given Lisbon's strategic advantage. I was told they have now put the LR to Boston and Toronto as well which are usually 339 markets. Also, Montreal is still starting at the end of July as bookings are strong.

My source also tells me that no decision has been made on Cancun and Cape Town and that the belief is that it is too early for now.
 
Duartelmatos
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Re: TAP Changes Rumor

Wed Jul 15, 2020 7:52 pm

There will be 2 daily flights on A321LR to Newark and one daily on A321LR to JFK. The A321LR is TAP’s aircraft with the best feedback from the passengers
 
flyingqueen
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Re: TAP Changes Rumor

Thu Jul 16, 2020 7:05 am

If this is true, it really is a big loss for TAP. Just when they need smart people, they let them leave. I agree with the other poster, both Rafael and Arik are very smart people. I hope the Board is smart enough to retain them. It is funny. TAP needed a totally different approach to commercial planning, and I thought Arik was the right person to lead it. Too bad though. Air Canada is a winner here. Wonder what he will do there as AC network planning really is way too YUL focussed.
 
MIflyer12
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Re: TAP Changes Rumor

Thu Jul 16, 2020 12:36 pm

Duartelmatos wrote:
There will be 2 daily flights on A321LR to Newark and one daily on A321LR to JFK. The A321LR is TAP’s aircraft with the best feedback from the passengers


Which passengers? If they lose many J (and I mean J, not heavily discounted long-haul business) passengers who believe that a 321 (irrespective of seat type) doesn't offer a suitable long-haul experience they're not coming out ahead.

As for frequency, what incremental destinations do they get with a second NYC-LIS flight? Are the continental and Africa departures not banked?
 
Duartelmatos
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Re: TAP Changes Rumor

Thu Jul 16, 2020 1:06 pm

Currently TAP has a question at the end of each flight asking how the experience was. The A321LR has the best feedback from the fleet. Besides, the business class available on these aircrafts is Long Haul business. It’s a fact that they only have 16 J seats but it is also true that the A321Lr is the aircraft with the best performance too.
The frequencies I said are available on the website and they can obviously change. And yes, not only does the second flight to EWR expand the network in terms of connecting flights, but also offers a good schedule for both people on business travel and other people who can take a flight after their work schedule.
 
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fidelidade
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Re: TAP Changes Rumor

Thu Jul 16, 2020 2:06 pm

Yes, the TAP product on 321-LR is not like other airlines J class. It is lie-flat seats with aisle access, and full WiFi, etc. As for network, any second flight will improve connectivity, and reduce times. It is network 101.

Arik's departure is a big loss, but I think his transformation will be more felt in revenue management, where he had been increasingly focussing the airline to move away from deep discounting. That was a big change for us from chasing loads and giving us confidence. His mantra was always simple. If you have the product, be confident, and show it off, and charge a premium. Before COVID hit, our average fares were up 17% YoY. I think it is part of the disciplined training he has.

I am sorry for us, and I hope people are still trying to keep him. Air Canada's big win.
 
abrelosojos
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Re: TAP Changes Rumor

Thu Jul 16, 2020 10:26 pm

fidelidade wrote:
Yes, the TAP product on 321-LR is not like other airlines J class. It is lie-flat seats with aisle access, and full WiFi, etc. As for network, any second flight will improve connectivity, and reduce times. It is network 101.

Arik's departure is a big loss, but I think his transformation will be more felt in revenue management, where he had been increasingly focussing the airline to move away from deep discounting. That was a big change for us from chasing loads and giving us confidence. His mantra was always simple. If you have the product, be confident, and show it off, and charge a premium. Before COVID hit, our average fares were up 17% YoY. I think it is part of the disciplined training he has.

I am sorry for us, and I hope people are still trying to keep him. Air Canada's big win.


= So, now I know who to blame for taking away my absurd J class fares. There are increasingly fewer of them. I still can't believe he is leaving though as the last time he spoke at a conference, he was really bullish about TAP. However, if my CEO got fired on national TV for no reason, I would question my role as well. As others have said, a huge win for Air Canada. It was time Calin made some top level changes there. Network planning seemed to have run out of ideas after Ben left.

Saludos,
Alex
Live, and let live.
 
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fidelidade
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Re: Updated: Portugal seals final deal with TAP's private shareholders

Fri Jul 17, 2020 12:10 pm

Here is the update we received just now.

Additional reductions for Dakar, Fortaleza, Recife, Belo Horizonte now moving to August because of Portugal borders. Conakry, Casablanca, Copenhagen, Luanda, Oslo, Bissau, Marakech, Sal, Tel Aviv, Vienna, Warsaw is moving to mid-August to September 1 re-launch.

We are getting updates all the time and I have never seen the network team being so proactively involved.
 
flyingqueen
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Re: Updated: Portugal seals final deal with TAP's private shareholders

Fri Jul 17, 2020 12:25 pm

Is the Air Canada moved confirmed? This is a big win for Air Canada to get someone of his talent.

But, I disagree with comments about Ramiro. I worked with him at Vueling and he is also good. I cannot see him at a network airline, but Aegean is small so he will do a wonderful job.

I feel bad for TAP though. How does the government let everyone go in the middle of a storm?
 
runway23
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Re: TAP Changes Rumor

Mon Jul 20, 2020 9:27 pm

abrelosojos wrote:

= So, now I know who to blame for taking away my absurd J class fares. There are increasingly fewer of them. I still can't believe he is leaving though as the last time he spoke at a conference, he was really bullish about TAP. However, if my CEO got fired on national TV for no reason, I would question my role as well. As others have said, a huge win for Air Canada. It was time Calin made some top level changes there. Network planning seemed to have run out of ideas after Ben left.


I disagree, AC had a successful strategy - during and after Ben. AC was reaching the point where pretty much any viable route to/from its hubs was served.

The absurd fares are back on many East Coast routes in J and the past few weeks TP was discounting YUL in Y to sub 100€ fares one-way. I’ve noticed pretty much all lower bucket inventory has now been pulled out of YUL, regardless of the date - wonder if it’s a sign TP might not launch the route ? Weirdly enough, TP never heavily discounted YUL/YYZ in J to the extent they did for their US routes.
 
airbazar
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Re: TAP Air Portugal's post COVID-19 crisis

Tue Jul 21, 2020 12:16 pm

Polot wrote:
airbazar wrote:
aviationlover7 wrote:
Now that David Neeleman is out, CEO Antonaldo Neves sacked and the Portuguese Gov. has a majority stake, will TAP’s strategy change?
I hope I'm wrong but I just don't see a scenario where this airline is still operating in 3 years in a function other that a very basic route structure and very unprofitable.

Everything you mentioned was going to happen regardless thanks to covid. TAP may have been “on a really good path” but let’s not pretend they have been wildly profitable the past couple of years, and that was during a boom period. They have been on a “really exciting for Portugal/TAP fans but still needing work on getting consistently high profits” path.

The losses had more to do with the airport than the airline itself and that is/was being addressed by expanding the current airport, building a secondary airport, and getting concessions from the air force for more efficient air space use. The foundation for a better future was being laid down and that is what costs the most money. A brand new fleet costs a lot of money. Retraining and restructuring labor, and changing the mentality across the firm not to mention lots of new hiring costs a lot of money. Re-inventing the schedule to turn the airline into a TATL connecting competitor costs a lot of money. All of that work had pretty much been done. The airline was well positioned to survive Covid because of its low operating costs and the fact that it doesn't rely heavily on premium passengers. Business travel will be the biggest casualty of Covid, not leisure travel. But I have little hope that a TAP in the hands of the government can continue on the same path.
 
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Polot
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Re: TAP Air Portugal's post COVID-19 crisis

Tue Jul 21, 2020 1:04 pm

airbazar wrote:
Polot wrote:
airbazar wrote:
I hope I'm wrong but I just don't see a scenario where this airline is still operating in 3 years in a function other that a very basic route structure and very unprofitable.

Everything you mentioned was going to happen regardless thanks to covid. TAP may have been “on a really good path” but let’s not pretend they have been wildly profitable the past couple of years, and that was during a boom period. They have been on a “really exciting for Portugal/TAP fans but still needing work on getting consistently high profits” path.

The losses had more to do with the airport than the airline itself and that is/was being addressed by expanding the current airport, building a secondary airport, and getting concessions from the air force for more efficient air space use. The foundation for a better future was being laid down and that is what costs the most money. A brand new fleet costs a lot of money. Retraining and restructuring labor, and changing the mentality across the firm not to mention lots of new hiring costs a lot of money. Re-inventing the schedule to turn the airline into a TATL connecting competitor costs a lot of money. All of that work had pretty much been done. The airline was well positioned to survive Covid because of its low operating costs and the fact that it doesn't rely heavily on premium passengers. Business travel will be the biggest casualty of Covid, not leisure travel. But I have little hope that a TAP in the hands of the government can continue on the same path.

The airport is an excuse. If TAP truly had low enough operating costs/acceptably low premium traffic levels they would be making money despite the airport. Expanding the current airport/building a secondary airport, etc cost money, cost that would be passed on to TAP in the form of higher airport fees. Costs like a fleet of brand new aircraft don’t just go away after delivery when Airbus gets a check-TAP is going to be paying for those planes for years.

Business travel is the biggest casualty of covid, but intercontinental leisure traffic is not far behind. People are going to staying more local/regional for a time until their comfort level of flying 7+ hours to another part of the world improves.
 
airbazar
Posts: 10120
Joined: Wed Sep 10, 2003 11:12 pm

Re: TAP Air Portugal's post COVID-19 crisis

Tue Jul 21, 2020 5:08 pm

Polot wrote:
The airport is an excuse. If TAP truly had low enough operating costs/acceptably low premium traffic levels they would be making money despite the airport. Expanding the current airport/building a secondary airport, etc cost money, cost that would be passed on to TAP in the form of higher airport fees. Costs like a fleet of brand new aircraft don’t just go away after delivery when Airbus gets a check-TAP is going to be paying for those planes for years.

Name 1 profitable network carrier operating out of a single runway airport with an insufficient number of gates. Have you even been to LIS? More than 50% of TAPs flights require busing. This is not an efficient hub by any stretch of the imagination. The airline cannot optimize connections in order to attract higher premium fares and maximize aircraft utilization. In addition LIS is subject to cross winds and fog which causes delays. Are you familiar with the EU's compensation law for delayed flights and missed connections? TAP pays out millions every year for that alone. In 2018 TAP paid out 40 million Euros in delay compensation. If you think the airport is just an excuse then you have no idea what you're talking about.
The other topic I left out is CO2 emissions. In 2018, TAP's old fleet cost the airline nearly 30 million Euros in emission licenses. The new fleet of more efficient aircraft should improve that but obviously there was/is an initial cost to acquire the fleet
My point is, the hard work has been mostly done to right the ship and put it back on course. There is little more they could have done with the infrastructure that they have to work with. The management team at TAP did a pretty good job over the last few years and it's pretty sad to see them get dumped like that.
 
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Polot
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Joined: Thu Jul 28, 2011 3:01 pm

Re: TAP Air Portugal's post COVID-19 crisis

Tue Jul 21, 2020 6:20 pm

airbazar wrote:
Polot wrote:
The airport is an excuse. If TAP truly had low enough operating costs/acceptably low premium traffic levels they would be making money despite the airport. Expanding the current airport/building a secondary airport, etc cost money, cost that would be passed on to TAP in the form of higher airport fees. Costs like a fleet of brand new aircraft don’t just go away after delivery when Airbus gets a check-TAP is going to be paying for those planes for years.

Name 1 profitable network carrier operating out of a single runway airport with an insufficient number of gates. Have you even been to LIS? More than 50% of TAPs flights require busing. This is not an efficient hub by any stretch of the imagination. The airline cannot optimize connections in order to attract higher premium fares and maximize aircraft utilization. In addition LIS is subject to cross winds and fog which causes delays. Are you familiar with the EU's compensation law for delayed flights and missed connections? TAP pays out millions every year for that alone. In 2018 TAP paid out 40 million Euros in delay compensation. If you think the airport is just an excuse then you have no idea what you're talking about.

I stand by my statement. If TAP’s operating costs and premium to leisure travel ratio was good enough they would be profitable despite the airport. TAP, after all, is the one who is decided they must do major expansion to coincide with profitability, instead of getting profitable then expanding. TAP’s low operating costs are partially a reflection of its mediocre operations- improving it (ie keeping more spares around, scheduling more realistic connection/turn times) cost money.

Most people TAP is targeting with their expansion have no idea what the state of LIS is. TAP are expanding to new markets with low fares in the hopes of capturing traffic, and the hope that down the line they can creep up prices/build loyalty as they get more established and recognition in the new markets. Covid has put an end for any hope of that strategy working out any time soon. TAP will be fine with the A321LRs, but now they have a ton of A339s that they need to find something to do with.

A new airport is not a magic bullet. That has costs. If two airports are kept open you risk fragmenting premium traffic (if old is in better location) which throws a wrench in plans (do you consolidate to new and risk losing premium traffic, or will TAP have to run a dual hub system which raises costs?). You are just replacing delayed compensation and emission costs with additional capex cost (how many new planes did TAP get in 2019?) and airport utilization costs. You can’t have your cake and eat it too.
 
aviationlover7
Posts: 54
Joined: Wed Dec 20, 2017 11:35 am

Re: Updated: Portugal seals final deal with TAP's private shareholders

Sat Aug 01, 2020 4:34 pm

TAP's COO takes over as the new interim CEO:
https://expresso.pt/economia/2020-07-30 ... nte-da-TAP
 
airbazar
Posts: 10120
Joined: Wed Sep 10, 2003 11:12 pm

Re: TAP Air Portugal's post COVID-19 crisis

Tue Aug 04, 2020 1:02 pm

Polot wrote:
I stand by my statement. If TAP’s operating costs and premium to leisure travel ratio was good enough they would be profitable despite the airport. TAP, after all, is the one who is decided they must do major expansion to coincide with profitability, instead of getting profitable then expanding. TAP’s low operating costs are partially a reflection of its mediocre operations- improving it (ie keeping more spares around, scheduling more realistic connection/turn times) cost money.


You are making my point without even realizing it. The infrastructure that they operate out of does not allow them to attract premium passengers. The average low yield passenger may not know it or not care but I guarantee you there isn't a single business flier out there who doesn't know that MAD, CDG, or AMS offer a better connection experience.
Expansion is the path to profitability. An airplane only makes money when it's flying. Once they decided to be a network carrier they have to expand to fill connecting seats. The only valid argument IMO is whether they should be a network carrier or focus on being a much smaller O&D carrier instead.
But by no means is the airport the only problem at TAP. I'm just saying that the airport is a major problem, among other problems. And on that topic, a new airport is only required because the government has been kicking the can for the past 50 years. Even 25 years ago (wow, that was only 1995), there was still plenty of space around the current airport for expansion. All of that space was slowly taken up by development and now there's no more room to expand. Well, there's always eminent domain but that comes at a very high cost too. No matter how you slice it Lisbon will need a new airport some time and the longer it's put off the more expensive it will be because that very large parcel of land that exists right now, is not going to be available forever.

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