TAP Air Portugal CEO, Antonoaldo Neves, tells Graham Newton that the airline’s transformation program is on track but changes in airspace and airports must keep pace
Ensuring an airline operates efficiently with high quality customer services is never easy. But as Antonoaldo Neves explains, it is especially difficult when the huge effort and investment is not matched by partners in the aviation value chain.
Has the “new TAP” performed as expected in 2018?
The new TAP Air Portugal performed well in 2018 but has still to improve a lot. Between April and October, 3.6% of flights were cancelled for reasons attributable to TAP, but this has been reduced to just 0.7%. We have also reduced delays caused by lack of crew about 60% and there are now no cancellations of flights for this reason. This year alone, we hired more than 340 pilots and 600 cabin crew.
Since the beginning of July 2018, we put new procedures in place. We have built an Integrated Operational Control Center, which brings together operational functions in a single space, we have created new teams for the management of each flight, and we have strengthened dedicated handling teams and support equipment. And for the first time in the history of TAP Air Portugal, we introduced three reserve aircraft into the fleet.
Customer satisfaction with arrival and departure times has increased 10% and 15% respectively, compared with the same period of last year and the number of lost bags has been reduced by two thirds by changing processes
We have also invested in customer service. We recently launched TAP Miles & Go, a new loyalty program that is now more international with plenty of advantages.
Customer satisfaction with arrival and departure times has increased 10% and 15% respectively, compared with the same period of last year and the number of lost bags has been reduced by two thirds by changing processes. We also reduced the waiting time for service in our Contact Center from seven minutes to two minutes and there is a plan to respond to all outstanding claims.
The service on board has been vastly improved too. In the first week after the launch of the new menus for economy class, we registered an increase of almost 30 points in a rating scheme we provide to our customers, known as the Net Promoter Score. We offer the possibility to book the meal in business class before the flight. It is very rewarding to see that our customers satisfaction index in 2018 grew about 40% globally over the previous year. We thank our employees for their commitment and our customers for their trust. Without them, it wouldn’t be possible to achieve these good results.
How does TAP Express fit into your business model?
TAP Express has played a key role in feeding our long-haul routes. The airline was equipped with new jet aircraft, Embraer 190s and 195s, which replaced the old Fokker 100, Embraer 145 and Beechcraft 1900D aircraft. These provide better service and expand the capacity of TAP Express.
Why is establishing low fare brands as subsidiaries now working when about a decade ago legacy carrier attempts to build low-cost models failed?
Low fare carriers have accelerated the change in customer needs and in customer acceptance of the model within the short-haul market but also across all customer segments. This change has influenced the success of low fare brand subsidiaries in recent years compared with a decade ago.
Is Star Alliance still relevant and do you see a future for alliances in general?
Star Alliance is relevant to TAP Air Portugal today and it will continue to be relevant in the future. Alliances are especially important for those carriers that are not part of a major airline grouping as they enable them to offer their customers a seamless interline service within the alliance network. And, of course, that network is considerably expanded. An airline can offer flights to destinations where it does not operate.
What is your view of Portuguese airport operator, ANA and the rising airport charges? What must be done?
This is a growing concern as ANA’s airport charges continue to increase. At the same time, our concern is amplified by the poor service levels at the airports and by the lack of investment that is critical to mitigate airport congestion. These are important areas that need to be addressed. ANA must enable TAP Air Portugal to deliver the service level that our customers deserve.
Where do you see your network growth coming from? You have opened new routes or frequencies in Europe and the United States, but the airline has strong ties in Africa too.
Lisbon is probably the best and definitely the closest gateway between the Americas, Africa and Europe
Our strongest growth, in terms of passenger numbers, is still in Europe. But it is true that we are launching new destinations and more frequencies in the United States and Canada, and we will keep on doing that for the next few years. In the United States, TAP plans to launch several new routes.
It’s a strategic market for TAP. Lisbon, due to its geographical situation, is probably the best and definitely the closest gateway between the Americas, Africa and Europe. So, the idea is for TAP to offer the best connections between these markets.
TAP continues to be very strong in Brazil, of course, where we fly to 10 different major cities, mostly with daily flights for each city.
But we decided not to depend on only one market, even if it’s as important and strong as the Brazilian market.
What are the main challenges for European carriers in 2019?
Air traffic control issues in Europe are a major concern. We look forward to the European single sky as it cannot come soon enough.
Another related challenge is the limitations imposed on airlines by the lack of airport infrastructure. There is no doubt that it is reducing the ability of some airlines to grow as quickly as they would want. That is surely the case for TAP at our Lisbon hub.
Is the Industry doing enough for the environment? What more can be done?
TAP Air Portugal continues to develop a set of initiatives aimed at modernizing the fleet. This will not only increase efficiency but also reduce fuel consumption and CO2 emissions. These initiatives have significantly and consistently improved our environmental performance indicators. The new Airbus A320neo engines burn 20% less fuel than our older models. And by the end of 2019, 78% of our widebody block hours will be flown on our Airbus A330neos.
We also provide our clients with the possibility of offsetting the carbon dioxide emissions associated with their travels. As a voluntary program, it is the passenger who decides, at the time of booking at www.flytap.com, whether to participate in the global effort to combat climate change. This should remain an important feature of the industry’s environmental efforts.
In addition to this, TAP Air Portugal continues to focus on a program in partnership with IATA, where the calculation of emissions is determined by a methodology developed by ICAO. The methodology is customized for the type of aircraft operating a given route, and through the program TAP supports projects certified by the United Nations in developing countries.
Is aviation progressive enough or is the industry still too cautious when it comes to adopting new technologies, particularly customer-facing concepts?
I think that the aviation industry is extremely progressive in adopting new technologies, particularly customer-facing concepts.
But some airlines can often be prevented from moving forward fast enough due to legacy systems, which have to be interfaced to new technologies used in customer-facing systems. The problem is that these legacy systems have to remain in use by network carriers in some airport environments to complete all the tasks required. There is the standardization of information exchanged between airlines to consider and the seamless provision of data requested by governments and authorities in various countries around the world.
The challenge for legacy airlines is that other carriers are moving rapidly and using more and more technology to develop and implement customer-facing technologies to support their customer handling concepts.
Where would you like to see TAP Air Portugal in five years’ time? Have you specific targets?
I want us to be flying 20 million passengers annually compared with the 14 million-plus we have flown last year and for our customer service to be of the highest standards. In terms of the growth of TAP’s network and capacity, it would be good to serve about 25 more destinations compared with today. We’ll need more aircraft to do that and so I would like to see some more than 100 state-of-the-art aircraft in the fleet with the older models having been replaced. There must be changes at our Lisbon hub too if passengers are to enjoy a seamless transfer process and our punctuality rate is to attain somewhere in the high 80%-range.
Finally, and most importantly, we will need engaged and dedicated employees. I expect TAP to have more than 12,000 direct employees in five years’ time.