Eduardo Fairen has been at the helm of Angola's national airline TAAG for almost two years. In this interview, he talks about the renewal of the long-haul fleet, new destinations in Europe and America, Luanda as a transfer hub and the Airbus A220.
Eduardo Fairen: «Joining an alliance is not on the top of the agenda»
TAAG did make a profit last year – the first profit in many years. How did you achieve that?
When you are going to restructure an airline you first have to get an overview of the situation and then look at all the accounts and make some very tough decisions regarding your costs. You have to align the business to reality. That is what we did. And we have been very aggressive on the commercial side. In 2022 we operated at a capacity of 56 percent compared to the pre-pandemic era and we still carried almost the same amount of passengers. This shows you what can be done.
You had to cut cost. Did you have to reduce the head count also? Was that difficult?
TAAG has a large number of employees. When I arrived here, there were 2800 people. In the coming years we will lose another 800. The reason is that a big part of the workforce is arriving at retirement age soon. So we didn’t cut too much before. This situation is a big potential problem for us, because we want to grow. We probably need more people at a certain point, but at the same time we have to retire many. So we will need to hire and train a lot of people, especially in the technical field.
You carried one million passengers. But your goal is three million bis 2027. How do you want to achieve that?
We need to expand our actual network and we have to increase the number of aircraft in our fleet sensibly. We have a plan for that as you have seen with all the additional leases for AIrbus A220 we have announced at the Paris Air Show. We know how and where we want to fly with these aircraft. In the coming months we’re putting this plan into reality. Keep in mind: There is currently a new airport being built in Luanda. This will help us a great deal in becoming a connecting hub in Southern Africa.
Between which regions do you want to connect passengers? I assume it’s in part Brazil and Africa. But what other connection pairs do you see?
We currently offer five flights a week from Luanda to São Paulo and we will leverage to six from August ahead. Probably we will go to seven by the end of this year. We have 14 weekly frequencies, meaning double daily flights to Lisbon and 3 weekly frequencies to Madrid. We are currently exploring some new international destinations. At the same time, we are operating in Johannesburg, Cape Town, Windhoek, Kinshasa, Pointe-Noire, and Lagos alongside lusophone countries, namely Maputo and Sao Tomé on the regional level. Important to highlight our connection to Havana every two weeks. We are planning to open up to 25 different destinations within Africa. The continent has 52 nations. As we receive the new aircraft, we will start opening up new routes regarding our business case assessment. This opens up possibilities.
You want to grow to 25 destinations in Africa. Will they be scattered all over the continent or concentrated in the south or west?
All over the region. If it makes sense to open a route, we will fly it. But we will not fly to places just for fun, we want to make money. First we will add frequencies, then step by step add new destinations.
TAAG still offers something on long-haul routes that fewer and fewer airlines do. There is a First Class on your Boeing 777s. How important is that still to attract travelers?
We are in the final steps to define our new inflight product. We want to deploy that as soon as we are ready. We want to complete the retrofits in the coming 12 months. We are starting with the Boeing 737 fleet and we will continue with the Boeing 777s afterwards. The number of seats and the space and the whole offering will be aligned to the standards of the 21st century. But at the same time we will always offer the African spirit and the Angolan flavor and very good value for money.
If I understand you correctly, you prefer to have a good business class instead of a mediocre first class?
I didn’t say that. We want to revamp our offering onboard and at the airport. They have been outdated here and there. I cannot say more at this stage. But I didn’t say that we will get rid of any class that we are having right now.
Today, so you will keep it?
We are studying all options.
TAAG wants to attract more transit passengers and more traffic to Angola. Yet it’s still very difficult to get a visa.
The Angolan authorities and key stakeholders specifically in the tourism sector are working to improve this requirement. Angola is a country open to foreign investment and with high tourism potential to be explored, so these visa administrative issues are likely to be addressed by the authorities. An important point of change is the infrastructure, namely the new Luanda International Airport, which will provide an important technological leap and more optimized conditions for migration services to deal with the visa process.
You have been allowed to fly to Europe again since 2019. However, with Lisbon and Madrid, the number of destinations is still small. Why is that?
We want to add some other destinations to correct that. But we haven’t made a decision yet.
What countries are you looking at?
We are searching on the European but even more so the American continent.
You’re offering codeshare flights to Frankfurt with Lufthansa. Do you see other possibilities of codeshare with other European airlines?
We have 29 agreements with different airlines in the world. We cooperate not only codeshare flights with Lufthansa, but also with Iberia and Gol in Brazil. If it’s a win win for both sides, it is interesting to us. Otherwise we’re not doing it.
So how many own long-haul destinations do you see TAAG serving on its own in the future?
From the four we are currently serving we will rise up to 10. This is what we have in our plan up to 2027.
Africa is a huge air travel market with a huge potential. Yet many attempts to liberalize it have not materialized. Do you think this will change?
Angola is one of the countries that will open their skies in 2025. And then there will be some other countries that will follow later. We have witnessed what has happened in Europe in the 1990ies and also in South America at the beginning of the 2000s. We have to carefully check what we liberalize and what we don’t liberalize. Open skies for African companies make sense because that will help to to grow and strengthen the African aviation industry. But what doesn’t make sense is that we are liberalizing our skies also for companies that have their headquarters on a different continent. This would result in African countries being dependent on operators from other continents like in the old days.
Is this a real threat?
During Covid we have seen how important it is to have strong African airlines. African countries were totally disconnected from the rest of the world for years. We had no connectivity. Also because aviation in Africa is not a luxury, but an absolute necessity. We have to watch out in order to have more flights and a stronger industry in the end, creating new jobs for Africa not in other regions.
Liberalization is often followed by consolidation. Do you see this happening in Africa too?
That will happen to a certain extent. There is no public budget in the world that should support an airline that is loss making. This is common sense.
Kenya Airways and South African are talking about creating a big pan-African group. They said they are open for other carriers to join. Is that of interest to TAAG or is it scaring you?
At my age and after so many years in this industry I’m not scared of anything. Many great people have plans. The real test is to bring those plans to reality. We at TAAG cannot be distracted by these plans right now, we have other work to finish our work first. If the right moment arrives, we will check and see if it makes sense for TAAG.
Angola is a big oil producer. Do you have an advantage because you pay less for fuel than airlines in other countries?
We have a big disadvantage. We are paying more for fuel than airlines in the rest of the world. We have to buy our fuel from the national producer. And that has usually a big impact on our cost.
One big item in your restructuring plan through 2027 is the renewal of the fleet. In total you’re expecting 15 Airbus A220s. When will you operate your first revenue flight with them?
As part of the company growth plan and multi-brand fleet strategy, TAAG Angola Airlines announced multiple commercial agreements during the Paris Air Show 2023, regarding the incorporation of Airbus A220-300 model aircraft into TAAG ́s operation. The Company formalized the order for nine aircraft in three days event at Paris Air Show, however, overall,international partners (lessors), TAAG has a total of 15 aircraft in the order book with Airbus, with first deliveries (in stages) expected from April 2024 ahead.
Will the A 220 fly the same routes as the 737s right now or do you do plan to do other things with the new aircraft because they have a bigger range also?
Initially, the first decision to have the A220s was to replace the Boeing 737 NGs. We do this in order to save fuel and also offer a better service to our passengers. After we ramp up the A220 operations we’ll see if we can do more with them.
There’s also a talk about an A220 with an additional tank that can offer even more range. Is that something of interest to you to maybe serve low density routes to Brazil?
I think the clients and I myself don’t want to sit in a narrowbody more than four or five hours. So the answer is no.
Would the Airbus A220-500 be of interest for TAAG?
First we have to incorporate the A220-300s into our fleet. After that we can see. It’s too early.
We haven’t talked about the long haul fleet yet. Now have 777-300s and 777-200s which are parked and you a wet-leased Airbus A330 from Hi Fly. How do plan to change the long-haul fleet?
We are already in negotiations with Boeing and Airbus concerning the replacement of older aircraft. But the production has almost collapsed and we don’t foresee that we will get aircraft before 2027. Our Boeing 777-200s are already 16 and 17 years old. They need to undergo a retrofit program in order to be able to fly some more years to close that gap until we can replace them with newer aircraft. We are very well advanced in the talks, but there’s still no decision about which aircraft TAAG will choose.
So you will also bring back the two 777-200s?
Yes, they will fly again.
And the wet-leased Airbus A330?
We have a contract with Hi Fly that runs up to September. We don’t know if we will extend this contract or end it. But it’s always good to have an ACMI reserve in case you want to explore new routes.
And which models are you looking at for your future long-haul fleet?
We were studying mainly the Boeing 787-9 and the A330 Neo. Until then we will operate the current wide body fleet with the retrofit cabin.
How many long-haul new aircraft will you need?
Today we have eight aircraft, we will grow to ten.
Today your total fleet consists of 23 aircraft, you have set the goal to get to 50 planes in 2027. So you want to grow to 40 regions and medium-haul aircraft?
Yes, the rest of the additional aircraft will be short and medium haul aircraft. We need to grow significantly. This is a challenge. We expect to have more partners on this journey in order to support our operation mainly in the deployment of the fleet but also in the area of maintenance and logistics support. We’re working on that.
TAAG had a close cooperation with Emirates that ended a few years ago. Is that something you’re looking at again – do you want to work together with a bigger partner or don’t you need that anymore at this stage?
This question needs to be addressed to the shareholders because only them should take that decision. But as far as we know, we will continue until our work is finished.
Could it be interesting for you to join an alliance? Could that bring any value to TAAG?
Marketingwise it would be nice. But honestly, I don’t think we are in the position today. We need to strengthen our business first. Joining an alliance is not on the top of the agenda.