David Neeleman on the A330neo and Doubling TAP’s Presence in the US (Across the Aisle):
I’ve lined up a handful of interviews here on the blog which you’ll see in the next few weeks. Today, I’m starting with David Neeleman. As you know, David has been behind a lot of different airline projects, most famously the founding of JetBlue. But today we’re focusing on TAP Air Portugal. Since David and the team took over TAP a couple years back, the airline has been transformed, but there’s a lot more change coming with a whopping 71 airplanes on order, and I had questions.
Every time I do one of these, there are at least one or two comments asking for information that I didn’t cover. This time, you can go find it yourself. This Friday (June 15), David will be promoting TAP’s stopover program on the ground in Brooklyn at the corner of Bogart and Grattan Streets from 3p to 4p ET with what the airline is calling an “Aviation Geek Meet-Up.” Head on over, get some goodies, and you can ask him all the questions you’d like. It’s an AvGeek dream. Now, on to the interview.
Brett Snyder, Cranky Flier: We are here to talk about TAP, and I’m specifically interested in the A330neo that you’re taking delivery of. Do you have one on the property yet?
David Neeleman, Co-Owner TAP Air Portugal: We haven’t got it yet. We’re gonna get it in September. It’s flying around — it’s got our colors on it — it’s flying around the world on test flights, but it hasn’t been certified yet. I’m actually gonna go next week to fly to Toulouse and then fly it back to Lisbon on a part of its certification journey.
Cranky: You won’t get the keys until September, and when do you expect to have it in service?
David: It’s about a year late so we’re kind of frustrated. There have been issues with the engines like everyone else, but we’re gonna get it and get them pretty quick. We’ll get 18 of them in 15 months with 7 by the end of the year so they’re going to be coming like popcorn.
Cranky: I didn’t realize it was that accelerated. Where are you planning on putting these into service first?
David: Probably North America. Probably JFK and Boston. Brazil’s obviously a great market for us, Sao Paulo and Rio [will follow] closely after. We have 4 A330-300s that are ex-Singapore Airlines that are going away and then 7 old Pratt-powered A330s. We’re gonna have retired 15 airplanes when they come on.
Cranky: So it’s primarily replacement.
David: Yes, primarily with some growth. And we’re getting  A321LRs for growth. Because the LR is going to be able to do a lot of the Transatlantic as well, southern and northern. So we’ll have a few units of growth and then we’re gonna have replacement.
Cranky: Are the 330neos that are coming going to have the same seats you have today?
David: It’ll be an upgraded seat. I don’t have exact details, but it’ll have lie flat, big screens, the whole bit. I think it’s going to be 35 [Ed note: actually 34] biz class seats on it and a premium economy section. [The 96-seat Economy Xtra section is an extra legroom section like Economy Plus, not a true premium economy]
Cranky: That’s new for you, right?
Cranky: My biggest question about the neo… it hasn’t been the most popular aircraft. It’s taken a few hits lately with Hawaiian going away from it and American choosing the 787. Why is this the right aircraft for TAP when others are coming to different conclusions?
David: I can’t speak for Hawaiian or American but it’s common to our existing fleet, so our pilots can fly the neo and the [A330]-200 so that’s important for transition and all that. And the economics are really good. I don’t know, Boeing’s being pretty aggressive with the 787, and the 787-9 and -10 are good airplanes, so it just depends on the individual airline. [The A330neo] is a great airplane, gonna offer us fuel economy. Our -900[neo] which is equivalent to an [A330]-300 are going to have lower fuel burn than an [A330]-200. So we’re going to have almost 300 [Ed note: actually 298] seats onboard in total and we’ll be burning less fuel than we’re burning today with 274, and our customers are going to love it.
Cranky: You talk about what routes it’s going to go on first, it’s replacement routes, but as you mention you have a few extra shells for growth. What does this open up for you that you can’t do today? Are we going to see you here on the West Coast?
David: Yeah, we totally plan on flying to the West Coast. In the Bay Area there are a lot of Portuguese that live there, and a lot of traffic to the Azores in the summer time. There’s a lot of Portuguese, and we think it’s a great market for us. It’s not just the West Coast, but we’d like to do equal the number of cities in North America as we’re doing in Brazil. We have 10 markets in Brazil, and we think North America including Canada can support 10 cities.
Cranky: How many today? You have 4 or 5? I guess it depends how you count Newark and JFK.
David: Toronto, Boston, JFK, Newark, and Miami, so we have 5 today with at least 5 to go.
Cranky: This we should see in the next couple years?
David: Yeah, you’ll see some next summer and the summer afterwards. Between the next few summers, you’ll see us get to 10.
Cranky: TAP obviously is an old-line carrier [that’s] been around for ages, and you stepped in to make a push to reinvent the airline. I know a big part of that is making Lisbon as a gateway to Europe, trying to increase connecting flows. How has it been working? Has it been going as you thought?
David: Yeah. Portugal is having a moment like no place ever has. People are loving that place. It’s unbelievable how much is being written and said. What we’ve done to that place, we brought more service from more places. Our [free] stopover program will bring in an extra 150,000 customers a year. And those people talk to their friends and relatives and associates at work saying “Wow, have you tried going to Portugal? It’s amazing.” The airport’s brimming with people, and we’re working closely with the government and ANA [Ed note: the Portuguese airport operator] to get it expanded as quickly as we can.
Cranky: What’s the split local versus connecting traffic?
David: Depends on where you’re talking. Brazilians go beyond more — more than 50 percent. But North America we’re getting more than 50 percent who stay in Portugal. We fly a lot from Northern Brazil, so we’re the only way to Europe without going back down to the South of Brazil. It’s like if you live in New York and you want to go to London, you have to go via Denver. That’s what people in Brazil have to do. We carry about a third of all traffic between Brazil and Europe because of what we have. The proximity between Brazil and Lisbon and pretty close, 7 hours away.
Cranky: From the US, it’s mostly Portugal destination. Is that something you want to change? Are you really trying to push to grow connecting?
David: Yeah. I’d like to have more.
Cranky: One way I know you do that, you have really low business fares. I guess in coach as well. But that’s part of the strategy, trying to drive [traffic] through price, or is that something that will shift now that you have the new aircraft with a newer, upgraded product?
David: We have more seats to sell. It’s more of a leisure market, so you know, we charge less. No different than JetBlue with Mint, they charge less than American does.
And that’s as far as we got. Again, if you have questions for David, go ask him yourself from 3p to 4p ET on Friday at the corner of Bogart and Grattan Streets in Brooklyn.
June 12, 2018 at 01:45PM Source: http://crankyflier.com