″ Portugal was one of the first markets to recover. In the summer of 2022 we will have 26% more capacity ″
An operation by Transavia, the low-cost airline of the Air France-KLM group, to the Portuguese market was among the first to recover this summer. Nicolas Hénin, commercial director, assumes that the lack of slots is a challenge. He does not want to comment directly on TAP’s situation – due to the location he may have to free up slots – but he guarantees that they will be aware of the opportunities because they want to continue to grow.
How do you indicate the Portuguese operation of Transavia?
Portugal is a fundamental market for us. It was before the crisis and was one of the first markets to recover from the pandemic in terms of traffic and load factor [ocupação].
The Portuguese market?
The Portuguese market. We were able to offer almost as many seats in July 2021 as in July 2019. It was one of the first markets to recover. We are betting on some key markets in Europe this summer: Greece, Spain and above all Portugal. In the Portuguese market, it had 93% occupancy rate in September. We have almost maximum occupancy on flights. It’s fundamental for us because Portugal is a market that combines types of complementary traffic: leisure, visiting friends and family – because of the large community in France – and a little bit of the business segment. This is one of the main reasons why it is one of the first markets to recover. Families want to reunite and we saw this immediately as soon as capacity was available.
What generated this quarter?
Our capacity is higher than what we had before the pandemic last quarter. We want to bet on Portugal’s recovery, maintain our competitive position there and improve next summer, when we intend to grow more.
What do you mean by that?
In the summer of 2022, we will have 26% more capacity than in the summer of 2019, between France and Portugal.
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To which airports?
For all. To Porto we will add daily flights; we will have between five and six daily flights between Paris and Porto next summer. We will have more direct flights to Faro and we will have five daily flights to Lisbon. All destinations will grow. We are going to launch a new route to Ponta Delgada and we will also increase our capacity to Funchal, giving rise to direct flights between Paris and Funchal. Wherever we grow, we will grow.
Why did you decide to launch a route to Ponta Delgada?
It was something that has allowed analysis for some time. We sometimes like to discover new markets and do one before [dos outros].
Does the French market also want nature tourism?
Yes, that’s why you already selected it before analyzing [da pandemia] because we are convinced that it is one of the emerging leisure destinations that will grow in the future.
Because of the pandemic?
Even before. We had some hesitation because there is little air traffic; and before launching a route, we need to assess the risk of placing a plane to these destinations and being able to stimulate traffic. But I think that after the pandemic these types of destinations will be perfect.
Are there more plans for the Portuguese market? An air base?
Until now, our growth has been focused on the French market and all our bases are in France, also because we are a little behind the competition. We were launched in 2007, so we have a lot to catch up on. France was a central area of development for us. There is still a lot we can do. Right now, that’s the focus.
Want to expand in France and then look abroad?
Yes, that’s the plan. And there is an additional difficulty in Portugal to be specific: there are constraints at the level of slots. Opportunities were not many before [da pandemia]; maybe that will change in the future. Of course we will look at any medium term possibilities. Not possibly next year, not possibly the next year, but in the medium term… In terms of destination, it’s one of the biggest for us. Portugal would be a strong candidate if we consider opening a base abroad.
But not soon.
Not for the next two years.
TAP standardized a State Aid. How do you see the company’s situation? Could TAP’s situation have any effect on Transavia?
It’s hard to say what the impact will be in the future. We were able to resume a very fast operation for Portugal this summer and as a result, when we look at the full summer – between April and October – Transavia France was the main operator in terms of capacity between Portugal and France. We were able to reach this position perhaps faster because we can reallocate capacity very quickly. How it will evolve in the future I don’t know, but there might be some opportunities in the future or maybe not. But let’s be very opportunistic because Portugal is a fundamental market for us.
Will you be on the lookout to see if there will be slots in Lisbon?
Clear. In Lisbon, but also in Porto. We are always looking for developments there. We’ve done this in the past and we’ve been successful in having them and we’ll try the same in the future.
But how do you see TAP’s situation?
I don’t want to comment on that.
Do you expect to reach 2019 levels by 2023/2024?
In terms of capacity, next year. Capacity will be higher in 2022 than in 2019. It will be about 15% higher in our network. Profitability will depend on the quality of demand in 2022.
Regarding Lisbon airport. what is your opinion?
It’s been a bit challenging this summer in Lisbon because the airport was congested. We worked a lot with them but we have this in different parts of Europe, because the speed of recovery, whether in demand or traffic, did not always correspond to the speed of recovery at airports. If the traffic increases more, compared to pre-pandemic levels, we will need to have that correspondence with the airports. But we are looking forward to seeing developments in Montijo or elsewhere because it could be a way for us to grow and expand in Portugal. If there is such a delay, there is, and we are monitoring the situation. The important thing is that the infrastructure development at Lisbon airport is in line with the increase in traffic that we have, even next year. We continue to discuss the issue with the airport.
What did Transavia learn from a pandemic? And what will this mean for the company?
Firstly, we improved in terms of agility by designing, for example, our network and taking advantage of opportunities. We had to redesign our network almost every week because one country was open, the other closed, and we had to make decisions and schedule flights every week. Now that agility and, from a business perspective, it also guides us to position capacity where demand is highest. We are still not 100% in a stable environment even in Europe and we don’t know what the future will be like. We feel that we are safe but we don’t know if a new variant will emerge and we cannot guarantee in the near future. We learn from what to advertise over the past 18 months and qualify if we have to make these kinds of decisions in the future – shifting capacity from one point to another and putting our capacity where the demand is.
The Portuguese government, like other European governments, has been saying that short-distance journeys must be made by train. What is your position?
There are two different things. One is what rules are going to be like. In France, when there is an alternative by train, which takes less than two and a half hours, you cannot fly point to point. For example, an Air France had to discontinue the route from Paris to Bordeaux. Then, we will have the way in which customer demand evolved. Customers will make their own decisions and what we see is that we already have the impact on the French domestic market, where in some places people have switched to the train instead of the plane. Therefore, customers will make their choices and we will adapt. What we are going to look for is to be complementary to trains; where trains don’t matter, planes select to be and people will continue to want to travel and we’ll fly.
Transavia will have more planes next summer. What kind of planes? What is the expansion plan?
We only have one type of plane and we want to keep it that way because for a low-cost airline it means a lot of efficiency in economic terms. It’s essential to keep one type of plane and that’s why for us it’s a Boeing 737 800. And that’s what we’re going to add to the fleet. We currently have 50 and we will have 11 more by April [de 2022] to have a fleet of 61 aircraft. In the summer of 2019, we operated 38 aircraft, so going from 38 to 61 is a significant growth and that is how we will be able to grow for Portugal by 26%, but also for Spain, almost doubling our capacity, and for Greece. Therefore, growing in our network, but growing for our main markets and where we have already seen a pick-up in demand this summer.
There are several cheap ones in Europe. Do you believe there will be consolidation?
It happens to happen. When there is a strong economic disruption, many times, some come out of these crises stronger, with a lot of liquidity, and some come out of crises with more difficulties. Therefore, it is the period of time in which business movements are seen. There are small more molded ones. It is difficult to predict why it specifies the speed of recovery, etc. But we have already seen not, that they failed.
A journalist traveled at the invitation of Transavia