Published in December 2015 issue
You may have heard his name before. Where? Maybe in the United States, Canada, Brazil, or Portugal. Why? Because that’s where the four airlines he has founded, directed, invested in, or worked on are based. David Neeleman is a successful entrepreneur, born in São Paulo, Brazil, but raised in Miami, Florida. He co-founded Morris Air (KN) (later bought by Southwest [WN]), helped launch WestJet (WS), founded and guided to success JetBlue (B6), and recently brought to life Azul (AD) with outstanding results. Now, Neeleman has put his hands on TAP Portugal (TP) and he talked to Airways about this.
By Daniel Carneiro
David, what led you to take on an ambitious project such as the acquisition of TAP?
Neeleman: In 30 years working in the aviation world, this is one of the highlights of my professional career. I have already created four airlines, but the energy, the passion, the satisfaction that I am experiencing today make me feel as if I were starting out for the first time.
I feel good in Portugal. I have been welcomed with open arms. This project makes perfect sense, because Portugal has a unique geographical situation, and is a true gateway to Europe. I have no doubt that it is the best country in Europe because it is at the epicenter of all geographies, and is a true ‘Atlantic Gateway’. That is where the name of the consortium originated. It is a gateway to several geographies. It is a real hub. TAP has a debt that is estimated at one billion Euros.
How do you intend to solve this, and how long will it take?
Neeleman: Our proposal is to keep TAP’s hub at Lisbon (LIS) and further reinforce the triangular link between Portugal, Brazil, and Africa. We will increase the number of flights to Brazil and the number of flights and Africa. We will increase the number of flights to Brazil and the number of flights and destinations in a market that I know very well, the USA. This market will be the ‘new Brazil’ for TAP.
I am sure that we will do what is best for TAP in order to re-establish its financial balance. We want TAP to increase its relevance in the Portuguese economy, generating wealth, attracting tourism, keeping and increasing its workforce numbers and, more importantly, guaranteeing that its passengers can count even more on this company and on its excellence-based service. More important than TAP’s value is the value that TAP creates for Portugal.
The renovation and expansion of its fleet is one of the keys for TAP resuming its growth. Will the announced order for 14 Airbus A330-900neos replace the previous one for 12 A350XWBs?
Neeleman: Yes, the new order replaces the old one. We will not comment now about future plans, fleet, and markets, because there are very many variables. But we have a clearly designed strategy that aims at reinforcing the links of Portugal with Brazil, North America, and Africa.
TAP flies to 11 destinations in Brazil. Are all these routes profitable as presently operated?
Neeleman: Brazil is one of the most important international markets for TAP. The number of destinations is actually 12. Our idea is to increase the number of flights and destinations. A commercial alliance with Azul is the natural way ahead and will be very important to provide connectivity to TAP’s customers inside Brazil and to Europe.
Do you foresee an integration between both airlines’ frequent flyer programs (Victoria and Tudo Azul)? And are there any plans to join Star Alliance in the future?
Neeleman: As I said, a commercial alliance with Azul, to share routes and benefit programs, is the natural way ahead and is bound to happen. One day, we may join Star Alliance, but we do not have anything definite in relation to that matter.
You talked about an expansion into the North American market. Should we expect a partnership with JetBlue, for instance? Is it in the plans to reach the US West coast and resume flights to Canada?
Neeleman: Yes. The idea is to significantly expand TAP flights to Europe and the US. It is too early to talk about possible markets and alliances, but there is no doubt that we will increase our presence there.
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How about expanding TAP’s network in Europe?
Neeleman: All flights within the Old Continent will continue to be monitored to check TAP’s performance. TAP has been doing an excellent job in these aspects for a long time. We will bring in new blood, and, who knows, a new vision to supplement the fine job that the TAP team has been doing.
What role will PGA Portugalia play after privatization?
Neeleman: We are still evaluating several scenarios regarding Portugalia.
TAP has gone through countless strikes, which significantly contributed to the negative results of 2014. Unions are strong in Portugal, and new strikes are a possibility in the future. What is your thought on this matter?
Neeleman: My history in the sector shows that I built my companies by always putting people first. Good economic results are a consequence. What I can say is that this new TAP management means to make the company grow, and thus help people to develop their professional and personal possibilities. I believe that, with the excellent group of professionals that work for TAP, the sky is the limit.
What can all TAP customers expect both in the short term and further on?
Neeleman: TAP is a national symbol. It is a company that has more than 70 years of history. We are committed to Portugal and to TAP. We will make this company make the Portuguese even more proud. This is a nation of maritime explorers, of people that always new that “Navegar é preciso; viver não é preciso” [“Sailing is necessary, living is not”, a quote from Portuguese poet Fernando Pessoa]. With our vision and work, we will do even more for the company, for the economy of Portugal, and to increase opportunities with both our present and projected network. I am sure that a new and prosperous phase is dawning for TAP, its collaborators, and its customers.