TAP Air Portugal looks to the neo to deliver future long haul vision

8 November, 2017

The senior management at TAP Air Portugal watched the first flight of the new A330-900neo last month with eagerness. The European flag carrier is the launch customer for the new generation version of the widebody, which alongside the short haul A320neo Family will play a key role in its future development strategy.

The airline is due to receive its first aircraft around the middle of next year, although entry into service could slip into the third quarter. It had committed to receive 14 A330-900neos and recently concluded a lease agreement with Air Lease Corporation to acquire four further aircraft, but it appears to have cancelled two of its direct orders from the manufacturer in the past month.

The A330-900neos will replace its current A330-200s and recently introduced A330-300s, but it is the transformation of its A320ceo fleet to the A320neo that could deliver the biggest growth opportunity as its 40 aircraft deal includes a commitment for ten A321neoLRs that are ear-marked for flights across the Atlantic to both Brazil and USA and long distance routes across Europe into Scandinavia and into Africa. They will reportedly be configured in a 175-seat arrangement to support their longer-range missions.

The general plan is to build frequency as part of TAP's new network model and will enable some routes currently flown daily with a widebody to be flown twice daily with the single-aisle jets. This will then free the A330s to potentially be redeployed into new markets or to operate alongside the A321neoLR on its strongest routes.

Speaking to The Blue Swan Daily on the sidelines of last month's CAPA-ACTE Global Summit, Elton D'Souza, SVP network & revenue management, TAP Air Portugal said: "The idea is to replace one flight a day with two flights a day so possibilities of offering customers more connections, more schedules and more access to markets."

The fleet strategy has already seen the carrier expand its current short and long haul offering and completely replace its regional flying by retiring the Fokker 100s flown by PGA Portugália Airlines and replacing them with a modern fleet of Embraer E190 E-Jets, complemented by new ATR 72-600 turboprops. As part of this the whole regional operation was rebranded under the TAP Express name from spring 2016 and the Ponte Aérea shuttle model developed for the domestic Lisbon - Porto market.

TAP has already passed the one million passenger milestone on its up to 18 times a day Ponte Aérea shuttle service and latest figures show it is playing an important role connecting Porto to the airline's long haul network. In the first nine months of 2017, TAP has carried over 650,000 passengers to Porto, with 9% (57,000 passengers) of this total originating in Brazil and a further 4.5% (28,000 passengers) purchasing tickets in the US. This data provides a firm foundation for the airline to consider the introduction of non-stop long haul flights from Porto in the future with the A321neoLR the perfect aircraft to serve these markets.

The strong growth in traffic from the Americas is being supported by TAP's partnerships in the area. Mr D'Souza says joint ventures now offer more control than alliances, and could include antitrust immunity. He says "much more is possible" with partnerships nowadays. TAP's partnerships with Azul Linhas Aéreas Brasileiras delivered 65,000 passengers to its flights across the first seven months of 2017, while Gol Linhas Aereas contributed 47,000 passengers, jetBlue Airways 35,000 passengers and United Airlines 15,000 passengers during the period.

TAP has witnessed considerable change over the past couple of years following its privatisation. This past summer it expanded its network capacity by around a sixth with new routes including Toronto in Canada; expansion to Abidjan, Bissau and Lome in Africa and a notable growth in Germany. It also increased capacity to almost 70 other markets across its network through additional frequencies and the deployment of larger aircraft. This winter flights to London City in the UK and Fez in Morocco have been added to its Lisbon network.

WATCH our EXCLUSIVE CAPA TV video interview with Mr D'Souza where he outlines how the airline has witnessed a "huge" 25% demand growth since modifying its product and the "extremely positive" introduction of "customer choice" fares; how TAP has witnessed record revenue growth every month of 2017 and expects the trend will continue for the remainder of the year; how profits in 2017 could double its 2016 performance; building a relationship with HNA Group through Beijing Capital Airlines and that approval of its joint venture with Azul by early 2018 will make TAP the "strongest European carrier serving Brazil".