Airline mogul David Neeleman addressed TAP staff today with a rallying cry to take on European ‘low-cost’ airlines with lower prices, better aircraft and higher frequencies on key routes.
As the ink dries on last night’s signing over of 61% of TAP’s shares to Gateway, the minority shareholder in the company said today that the low-cost companies are the biggest challenge and revealed his plan to have low rates to attract cost-conscious customers.
"I passed through Oporto airport the other day and I was unnerved by eight Ryanair and four easyJet aircraft. We cannot give up. We have to become more competitive," said the businessman at a meeting with TAP workers in the company café in Lisbon.
According to Neeleman, the key is all to do with pricing, "We will have a €39 charge, but the passenger will pay extra for baggage. We will be like Ryanair with five flights a day, not just one.”
Neeleman said the secret in competing with easyJet and Ryanair is flexibility, and creating a culture of service so that passengers want to go back to flying with TAP.
TAP’s new US-Brazilan part-owner appealed for an effort by all workers, to build "a strong TAP, the best airline in Europe and maybe in the world, we cannot succeed without you."
State holding company Parpública controversially signed off the deal on Thursday evening despite calls from the Socialist Party, and a parliamentary motion from the Communist party, to freeze the sale as both parties claimed that the current caretaker government does not have the right to allow the deal to go through.
There remains the question as to who wears the corporate trousers at Gateway with the Civil Aviation Authority still waiting for full information before it agrees to the deal and issues a new operating license.
By addressing the staff and attracting media attention, Neeleman today made clear that he was in charge; his senior partner in Gateway, Humberto Pedrosa, was nowhere to be seen yet it is imperative that Pedrosa at least appears to be in charge.
During his meeting with TAP workers, David Neeleman announced an order of 53 Airbus widebody aircraft, including 14 A330-900neo, 15 A320neo and 24 A321neo. (‘neo’ means New Engine Option).
These new aircraft are part of the fleet renewal plan announced by Gateway and replace a previous TAP order by specifying aircraft equipped with more efficient engines, lower fuel consumption and greater on board comfort.
Due to the inflexibility of state owned bank Caixa Geral de Depósitos, Gateway had to find the money for this large order from 'other sources' while the treasury and Caixa Geral’s management continued their long-running bicker-fest.
The conditions imposed by Caixa Geral during TAP debt renegotiations managed to lengthen the time taken to sign the deal and dramatically increased the tension between the ruling coalition government and the state owned bank.
Finance Minister Maria Luís Albuquerque accused the Caixa Geral team of imposing over-demanding conditions for new TAP loans which hindered the privatisation process.
All is not well with the workers. The TAP Workers Committee today criticised the government for rushing through the privatisation after the Pedro Passos Coelho government had been voted out in Tuesday's parliamentary coup engineered by the Socialist Party and left wing alliance.
José Augusto from the Workers Committee said today that the Government statements were that there is no money in the short-term for aircraft fuel or wages. "Of course this was from someone who wanted to push through the deal at all costs."
"We know that things are not going well at TAP,, that there has been a revenue shortfall, especially in Brazil, and we also have competition from 'low-cost' airlines. The aviation market is highly competitive, there are difficulties, but the government’s claims of TAP’s imminent collapse were to only to validate its argument that the privatisation was inevitable," said Augusto, putting into words what many already suspect is true - that the 'imminent collapse' of TAP was just a ruse to get the deal signed off before the Socialist Party and left wing alliance take control of the government.
Augosto also asked why TAP’s debts could not have been renegotiated by TAP to improve cash flow and allow the airline to continue as a state owned enterprise.
The committee will meet workers next Wednesday to discuss the whole issue of the privatisation along with invited representatives of the Socialist Party, the Communist Party, the Left Block and trade unions.
