Next on TAP
Aviation entrepreneur David Neeleman talks about the investment in TAP Portugal, its growth plans and new aircraft
BT: People recognize your name as the founder of JetBlue and the equally successful Azul Brazilian Airlines. What’s your role with TAP Portugal?
NEELEMAN: Together with an investment consortium, we bought a controlling interest in the airline. As the catalyst behind its privatization (it was previously a governmentrun carrier), it allows us to become heavily involved in its growth plan.
BT: TAP Portugal is already a leader between Europe and Brazil. What else is in store for the transatlantic market? NEELEMAN: As the launch customer for the new Airbus A330neo, we have big plans for growing the transatlantic market. We are redesigning our business class cabins with full-flat seating and updating economy class with on-demand entertainment systems to provide the premier inflight experience. As many as six of the new A330neo aircraft are due to us in October of 2018 and will begin coming online fast and furiously allowing us to retire older aircraft and launch new routes at the same time.
BT: You are also taking delivery of new narrow-body Airbus A321LRs. Where will that fit into the TAP network?
NEELEMAN: This is really exciting because it will allow us to launch daily service to more markets like Boston, which are within the standard range of this smaller aircraft. We also are looking at secondary markets like Hartford, Montreal and Providence, which allow us to connect Europe (particularly southern Europe) with the large Portuguese population in the northeast while also carrying Americans interested in visiting Europe. This aircraft will give us great flexibility because we can fly them to northern cities in Brazil, too.
BT: TAP Portugal seems perfectly positioned geographically to connect Europe with the Americas.
NEELEMAN: Lisbon is a great entrance to and hub airport for Europe allowing us to connect passengers between Europe and Africa and the Americas. In fact, we carry the majority of traffic from Europe to Brazil where passengers also have connecting opportunity with Azul’s large domestic network. Nearly 40 percent of the airline’s revenue comes from this market. But we are also seeing strong demand on North American routes (Toronto was recently added in June). On the European side, we recognize that Portugal is a small country, and we have to look beyond our home market for traffic. The Iberian peninsula is a strong market
for us; currently, we serve 11 cities in Spain and offer one-stop service to nearly a dozen cities in the Americas from popular places like Barcelona, Bilbao, and Seville.
BT: Does TAP Portugal’s membership in Star Alliance influence where you will add flights in the future?
NEELEMAN: Yes, we are looking at markets like Chicago and San Francisco, both of which are United hubs with strong connectivity. This helps us to support nonstop service to Lisbon. But the A321LRs will allow us to go into secondary markets without much connecting feed, which is also exciting.
BT: TAP was a pioneer in its online bidding system for business class upgrades. How does this work?
NEELEMAN: We never like to see our seats go out empty on an airplane, and this offer is incredibly popular. People make a bid (with a set minimum amount already in place), and any unsold seats are awarded to the highest qualifying bidder at the time of departure. Of course, we would like to receive full fares on every seat, but like most airlines, that’s not always possible. This allows us to strike a nice balance while maximizing potential revenue. It is also a great way for people to experience the premium cabin for a solid discount.