“Part of our commitment when we bought the airline and privatized it was to invest in an entirely new product, new seats, new customer service,” TAP Portugal CCO Trey Urbahn told media attending the Aircraft Interiors Expo (AIX) in Hamburg. “This airline never had the capital to invest in its product and we believe this is what it needs. This [project] was ‘Takeover Day One.’ We are turning all the interiors out completely and replacing them with lie-flat seats and a new three-class cabin. We are densifying on one hand, but also improving the product at other end, to give the customer choice.”
TAP is partly making the changes in response to low-cost carrier competition. “TAP’s basic product needs to compete with low-cost carriers on a point-to-point basis. Portugal is an important market to easyJet, Ryanair and Vueling. On point-to-point, we have to be able to offer the same price as easyJet or Vueling and, up until now, legacy carriers have not done that largely because they can’t compete on cost. Over time the low-cost carriers have grown and grown. We need to defend that market; it’s important to us.”
Three classes will be introduced on all of TAP’s short-and long-haul aircraft. TAP is taking both auxiliary-tank equipped and long-range A321neos for transatlantic services, which will also be fitted with lie-flat seats.
On short-haul, business-class pitch will increase to 33 inches and middle seats will be blocked by a table. The cabin revamp will increase the density of its A319s from 132 to 144 seats. Its A320s will shift from 162 to 174 and the capacity of its A321s will rise from 200 to 216. This will lower its unit costs by 15% in the economy cabin, before accounting for new ancillary fees, allowing for more competitive fares.
“The lowest-price product will be completely unbundled. We intend to be competitive. The days of them [low-cost carriers] having price advantage? We are done with that. We recognize that they [price-sensitive travelers] represent a segment—a relatively important segment—of the customers we need to serve. We will offer our customers choice, the ability to buy up to the products and services they want. Passengers who want the lowest prices will have to carry hand luggage and pack light. There is a link between what you pay and what you get, and customers want lower prices.”
The narrowbody overhaul will begin in September 2016, at the rate of four aircraft per month, and the widebodies will join the program around January 2017. The work should be completed before the fourth quarter of 2017. “This is pretty ambitious. It’s a lot of airplanes,” Urbahn said.
TAP has 14in operation, comprising a mix of GE- and Pratt & Whitney-powered aircraft, but only seven of these will be upgraded. “The A330-200 has a long future. The Pratt-powered aircraft will be phased out earlier, but the GE-powered aircraft will stay for eight years or so,” he said. “Ourwith Pratt engines have an older Panasonic inflight entertainment system which is not audio-video on demand (AVOD) and the retrofit cost is enormous. We are in the process of evaluating whether to make that investment.”
In the cabin behind the wing, TAP will offer a thin, pre-reclined fixed-back seat at a 28-inch pitch, with bring-your-own device inflight entertainment and Wi-Fi connectivity, as an unbundled economy product for price-sensitive travelers. “It’s a very comfortable and tolerable seat, despite the higher density,” Urbahn said, adding that it is similar to the product operated by Vueling and Air France.
Forward of the wing, it will have an “economy plus” product, making up 40% of the total seat count, with a reclining seat and a 33-inch pitch. TAP’s economy plus product will be a small step up from economy, rather than a premium-economy offer. “This gives an upgraded experience, but it is also very, very efficient. The product differentiation between economy plus and business is enormous.”
The A330 upgrade will include a shift to full lie-flat beds in a staggered configuration, supplied by Thompson Aero Seating. Urbahn said that the Thompson Vantage lie-flat design means the A330 business class seats can go lie-flat, without losing density. Instead, it has created space for one more seat – increasing business-class to 25 seats. Overall, thewill be configured with 269 seats, compared with 268 today, by optimizing galley and closet space.
“We are transitioning the quality image of TAP. Today it is primarily a leisure airline, so we have a lot of families travelling together, even in business class. Lisbon is not a market like London, which has a large base of high-value premium customers, so we believe we need the right mix of density—high-density, higher quality—than we offer today and the Thompson seat was a good fit for that.”
On its long-haul product, TAP elected for a minimal jump between classes because a premium economy product would have required a 38-inch pitch, fewer seats, higher costs and more expensive fares, and it could risk cannibalizing business class. “It needs to be priced based on costs because of real estate. Throughout the process, we will continue to offer passengers the ability to upgrade [from economy to economy plus]. It could be as little as €50 ($57) transatlantic, which is nothing like the premium you see on premium-economy tickets, which are typically 50% to two times more than an economy seat.”
The Portuguese carrier’s A340s, which have just been through an inflight entertainment upgrade, will be excluded from the program.
“Our original plan was to retire them early, but it’s actually a really good aircraft—at today’s fuel price, they are probably the most profitable aircraft we fly, because we own them. We invested in a revamp a few years ago to give them state-of-the-art inflight entertainment, so they will continue to fly for four to five years. The A340s will remain as they are, we are not contemplating any change to that. They will be the first aircraft of our widebody fleet to exit and we will probably reduce their utilization substantially and operate them more or less as spares.”
Airbus will supply the service bulletins (SBs) for the work, along with the engineering design, methodology and overall integration, but TAP will carry out the work in its own maintenance and engineering facilities. This will not affect its third-party work, as TAP has “a lot of capacity” at its Brazilian maintenance operation.
The modification work will bring TAP’s existing fleet up to a similar standard to its incomingneosand. TAP is the launch customer for the, which is equipped with Airbus’ new, due for delivery by the end of 2017.
TAP will equip its 14 A330neos with more than 4,000 Recaro economy and business class seats in a three-class layout, including the standard and premium versions of Recaro’s CL3710 economy class seat and the CL6710 business class seat. “Even economy class passengers will be able to enjoy a seat with 12-inch IFE, USB and PC power supply,” Recaro said.
During the briefing, Urbahn urged Airbus to offer the Airspace cabin on the A321. Airbus head of cabin marketing Ingo Wuggetzer said: “Thefamily will follow. All our new cabin developments will be based on the Airspace product. I don’t know yet when that will be finished, or when it will be done, but will be done.”