What TAP Air Portugal shows us about travel recovery

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Portugal’s rapid and successful vaccination rollout, allowing it to reopen earlier than its neighbors, has made the destination a favorite destination in Europe. But the increase in tourism to the country has coincided with the airline’s steady recovery trajectory – amid government-funded restructuring and uncertainties over the ongoing pandemic.

“Our capacity for this winter is already 80% compared to 2019 and we expect a similar trend for next summer,” said Christine Ourmières-Widener, CEO of TAP Air Portugal, at the Skift Aviation Forum on Wednesday. “We haven’t really made any significant changes in our network in terms of the region we serve. It’s more that we’ve played around with the frequency and type of planes we fly to certain destinations.

The airline’s demand curve also varies compared to the rest of the European carriers, Ourmières-Widener told Madhu Unnikrishnan, editor-in-chief of Airline Weekly, explaining the competitive advantage of TAP Air Portugal, despite the presence of the low cost European carriers to Portugal.

Not serving Asia, for example, and getting to Brazil earlier than North American carriers – the airline’s second-largest market outside of Portugal, with a significant increase in bookings – meant facing fewer restrictions. and barriers at borders.

“Brazil is a booming market,” Ourmières-Widener said, adding that Brazilians are currently unable to travel to the United States due to the large backlog in visa processing, but that they are heading for Europe. Of the 11 destinations in Brazil to which TAP Air Portugal flew before the pandemic, 10 returned for the winter season, albeit with lower frequencies. North American flights, including to JFK and Newark, are being restored now that the United States has reopened to all vaccinated travelers.

The return of travelers comes as the airline undergoes restructuring focused on adjusting capacity, cutting costs, improving balance sheets given the debt incurred during the pandemic, and increasing the efficiency of the economy. income side. The latter has helped meet the significant increase in customer expectations for a digital experience, said Ourmières-Widener of TAP Air Portugal.

“So how can we improve this full digital experience for our customers, but also how can we optimize our distribution structure that supports our revenue growth and our revenue structure? “

Getting more information before and mid-trip has become more important as customers seek to have more confidence in the overall experience, which has resulted in an upgrade of the human experience alongside the digital experience, said Ourmières-Widener. As a result, the airline has focused on its call centers.

“We have seen a huge increase in the number of calls, even with upgrades to our online experience. And I have to say that TAP was surprised by the pressure on the call center.

The rebound for TAP Air Portugal points in particular to demand from Brazil, but also to demand from business travelers and VFR from Portuguese-speaking Africa, even in the midst of a pandemic.

“It was a really good surprise because it’s something you might not be able to predict before the crisis, but yes, all of our markets in Africa have been really resilient, the most resilient market during the crisis.” , said Ourmières-Widener. “And we kept our network. It is also very important for us because we connect communities with a very strong link with Portugal and this is something that we have kept during the crisis.

Ourmières-Widener characterized the Portuguese-speaking market split as 60/40 VFR and business travelers, given the oil and mining industries in this part of Africa, agreeing that when commodity prices are high, traffic business from Portuguese-speaking Africa is also high.

But will TAP Air Portugal expand beyond its historic stronghold in Portuguese-speaking Africa to other parts of the continent?

“I think for 2022 we have to be very careful – why, because first of all, as you mentioned, we are in restructuring, we have state aid. It would be difficult for us to leave these countries without taking a significant risk by investing in new destinations.

TAP Air Portugal’s strategy is to strengthen its network and its positioning in Portuguese-speaking Africa, as 2019 levels have not yet been reached.

“We will therefore first strengthen by ensuring that our positions are even stronger in 2022, then we will see in 2023. But our industry is still in full recovery,” said Ourmières-Widener.

“But 2023 will hopefully be a different story, I’m sure – but 2022 will be about rebuilding.”

This will include that the government will take a long-awaited decision on a new airport for Lisbon, on which Ourmières-Widener said the government is now ready to make a decision.

“As the primary national carrier, that will then give us the ability to build a plan and build the growth, I think beyond 2023, 2024.”

The CEO of TAP Air Portugal confirmed the airline’s commitment to sustainability as part of the net zero 2050 goals of the global airline group IATA, as part of the restructuring, and that it is currently working with suppliers energy in Portugal for a sustainable fuel for the next year. “This is an expectation of our customers, but it is also an expectation of our employees and also of our shareholders,” said Ourmières-Widener.

With all the changes to come after the pandemic in the airline industry, the one constant has been the lack of diversity at the leadership level. As one of the few women at the helm of a major airline, Ourmières-Widener told Unnikrishnan that she remembers being the only woman in the hangar when she was just starting out, after studying engineering.

“We have to prepare the next generation and identify new talent and make sure they are ready for the next steps,” Ourmières-Widener said, adding that it is the responsibility of leaders to make sure this happens. .

Her message to young women: “It’s possible. If they have ambition and if they have no problem working 24 hours a day, 365 days a year, because that’s what the airline asks of everyone, men or women. And I think the industry is ready to see that more and more, so that’s very positive.


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