Cargo Chat: TAP Air Portugal adapts strategy in light of COVID-19

[caption id="attachment_86851" align="alignright" width="300"] Miguel de Paiva Gomes is TAP Air Portugal’s global chief cargo officer.[/caption] COVID-19 created obstacles across the aviation industry as travel restrictions and mandatory lockdowns grounded flights for months. Many passenger airlines, including TAP Air Portugal, transitioned into flying passenger planes loaded only with cargo to try and recover their lost revenue and increase global capacity. Air Cargo World spoke with Miguel de Paiva Gomes, global chief cargo officer of TAP Air Portugal, about the decision to modify two of its aircraft to fly cargo-only flights and how TAP is looking to expand cargo opportunities in the future. Air Cargo World: TAP began reconfiguring its first of two A330-900s by removing seats around mid-May. When was that decision made, and what were some of the key conclusions that resulted in this? De Paiva Gomes: First of all on a context basis, TAP is a flag company for Portugal. Given the pandemic situation, we set ourselves to three main priorities. First, of course, to protect our employees. Second, we had a mission to make sure we would assist with the pandemic, so we would make sure we used our capabilities — being our own-operated fleet or as charters — to assist the country in getting all the medical equipment, as soon as possible, into the country. So we started — I think it was March 27 — with our first flight from Shanghai, which was sent to the national health service of Portugal. It required new routes, new planning, new local partners in China, also new crews. We were quite fast, we were not the first airline to decide to take our fleet to China. But there were no major issues flying medical cargo in the bellyhold as well as in the cabin. We did around thirty of these flights, most of them with our own fleet but some of them with chartered capacity like the 747 freighters. But most — I would say twenty-three of them — were our own fleet. Our key objective was to make sure we would increase our capacity. So we were loading approximately 160 cubic meters, but it was desirable to reach at least 200 cubic meters and get some more payload. The distance traveled reduces the payload because we have more fuel. Then the idea came to make a couple of the aircraft chairless and increase our volume as well as weight capacity to make sure we could make it in at least a sustainable way, in terms of financials. We’ve done many flights at cost, and by making a few of them chairless we get some advantage there. In a nutshell, this decision was made mid-April. So in fifteen days, we said “Let’s do it,” and then acquired our [supplemental type certificate] to take the economy cabin chairs out, create new manuals, all of that. We did our first flight with the chairless airplane around May 24, so it took us a month or so to get permissions. ACW: What started as one-off charters and just a couple of routes to China quickly developed into a structured, regular network of cargo-only flights, including to Africa, South America and the U.S. What has this experience been like, and how long do you expect to keep this cargo-only network? DPG: One thing that is also interesting, from a global perspective, is our hub in Lisbon. We were rather lucky, given our aircraft types, to be in Lisbon for crew change and fueling. It allows us to do flights to Asia, [return to] Lisbon and then move on into South America, Africa or the U.S. We’ve done a few other routes with medical equipment. With COVID, TAP’s 400 daily flights were limited to serve our islands, our territory, with Embraer, with TAP Express Portugal. As with any other airline, cash is king, so it was very quick for our senior management team to realize that, and we knew that restrictions were not there for cargo, they were there for passengers. So given our strategic position in certain markets like Brazil and Africa and our recent expansion in North America, we started operating our A330neos only with bellyhold cargo. We started with the freighters on a regular basis. I’ve given you two of our priorities — the safety of employees and to combat COVID — but the third had to do with serving the clients and the economy. We did that for Portugal, Brazil, Africa, Angola, Maputo. And since April, we’ve operated around ten to twelve widebody flights per week on a regular basis. We also started flights to Chicago — it was a new destination for TAP last year but for cargo it’s a relevant one. Since then, we’re now doing triangular flights of cargo, so we do Lisbon-Miami-Guarulhos-Lisbon, connecting the U.S. to Brazil. We’ve seen in the past restrictions due to COVID, so we make sure we get a regular direct connection and we do these triangular flights. ACW: Would you say TAP has now placed more emphasis on the importance of cargo in light of the pandemic? How will this change going forward? DPG: Yes, I think our executive commission has seen the capabilities for TAP in the cargo business. This was not a single effort of the cargo people, it involved a lot of planning, operations and crewing. The freighter option has been in study at least for two years. Even before I joined TAP, 747 freighters had been in evaluation for at least two years as it was meant to connect China with our network. We did not go for the freighter because, well, you know how the last two years have been for air cargo — not a fantastic period for us to expand — but I must tell you that China is among our top-ten cargo origins. We were using third-party interline agreements into Europe. In Europe, we run a wide fleet of express trucks as well, just like we do in Brazil or in the States. We were working to connect China with Lisbon, making China a top-ten origin for cargo. ACW: The Portuguese government recently provided around $1.4 billion in aid to TAP, and is now the largest shareholder. What impact will this have? DPG: There will be a restructuring exercise and I would guess some strategic drivers will also kick in. We want to make sure we serve the Portuguese-speaking communities and our main partners as a flight company, in an economical way. So let’s see how the strategy adapts to the new shareholder structure. And we have the financial help that is needed, so we’ll see where that takes us. It should be an interesting journey.

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