As U.S. Business Rebounds, TAP Air Portugal Targets Corps.

TAP Air Portugal director for the Americas Carlos Antunes about three years ago returned to the carrier to head the Brazil market, nine years after first leaving the carrier, and in July 2023 took over as director for all of the Americas. He discussed with senior editor of transportation Donna M. Airoldi how TAP has changed in recent years, the recovery and current state of the carrier’s business travel segment, future New Distribution Capability plans and what corporations are looking for in an airline partnership. The following interview has been edited for length and clarity.

BTN: What is TAP’s market like now? 

Carlos Antunes: Brazil is the No. 1 market for TAP, and the United States and Canada are the second most important markets, then comes Europe and Portugal. The Americas represents roughly 35 percent to 40 percent of revenue generation. Our focus is point-to-point. As the national airline of Portugal, we promote and sell Portugal and we sell beyond. We have more than 50 destinations beyond Portugal. It’s very easy and convenient for us to sell Europe using Portugal as a gateway of entry for leisure and business. 

BTN: What has changed since your prior time with the company?

Antunes: It’s a very different TAP from the TAP I left in 2012. We’ve grown a lot. Our aircraft are brand-new. We have Airbus A330s, the A330-900neos, and we can reach the northeast of Brazil and the east coast of the United States using the Airbus A321 long range. It’s a very capable aircraft. Not too big, not too small, and very cost-efficient. It gives us an edge on costs and flexibility.

BTN: What is your breakdown between business and leisure, and how did that change in 2023?

Antunes: Let me start by saying that there’s not that much corporate travel between the U.S. and Portugal, but that doesn’t mean TAP is not a corporate-oriented airline. Most of the traffic is leisure, but we do have destinations which are corporate. We operate out of nine origins in the U.S. and Canada via Lisbon and Porto to more than 50 destinations in Europe. So, we do have a package of corporate products and work very hard to ensure that that is a part of our revenue generation. 

2022 was not good on corporate overall, especially in the U.S., which took longer than other countries to recover from the pandemic. Other countries, for example Brazil and even in Europe, we would see people and companies traveling for corporate purposes. The local companies in Brazil were already buying tickets for corporate purposes and the multinationals were not. From 2022 to 2023, we saw a big difference in the percentage of corporate. The corporate we can track, which is the formal corporate bought through travel management companies, in 2022 was about 10 percent of our total revenue generation. It grew a lot in 2023 and went up to 20 percent. 

[For 2023,] the U.S. grew 58 percent year over year and the TMCs grew 60 percent. Globally, the TMCs from 2022 to 2023 grew 30 percent. So, the U.S. has shown a recovery in 2023 that other countries were already showing in 2022. We believe that our total corporate is around 30 percent. We get that from the TMCs, the databases from the small and midsize enterprise loyalty program that we have, and also from the contracts we have with corporations. Thirty percent is a good percentage for a company that operates mainly to Portugal and forward to destinations in Europe. 

BTN: What changes have you made to the corporate sales department? Are you changing the way you engage with corporate buyers?

Antunes: I’m very happy to have found a team that was already corporate-oriented. We have a team of more than 20 people in the U.S. and in the Americas, we are around 70 people. The things we are working on are not necessarily to change but to optimize, to make our presence more efficient. We need to ensure that the travel agencies understand our unique selling proposition … and the package that we offer in terms of corporate products. 

Because we’re small doesn’t mean we are not spread out in the [U.S.]. We have seven key account managers, and we visit face-to-face with the customers. We need to be present. We will keep being focused on corporate travel, and we are investing a lot in bleisure. We have a stopover program that has been enhanced since it launched in 2017. We added partners, benefits and discounts and increased the length of stay in Portugal. You can stay in Lisbon for up to 10 days either on the way there or on the way back.

BTN: How is the stopover option going in terms of use by corporate clients?

Antunes: For the first nine months since the relaunch, the U.S. and Canada are the second most important market that have adopted it. The first is Brazil. I have data that says about 4.1 percent of the tickets sold to Europe have enjoyed the stopover. We have plans to further increase the number of partners this year, and to have a website where the passenger after buying the ticket can go and plan the stopover.

BTN: What trends are you seeing in business travel?

Antunes: We’ve seen both in the U.S., and in North and South America, MICE [meetings, incentives, conferences and exhibitions] coming back, especially the incentives. We see a strong demand for the business that was pending and for new business. New business is smaller groups. We also see especially from the multinationals that have resumed corporate travel, there still are parts of trips that used to be there that are no longer there. They are traveling for more mission-critical situations, to close a deal, to inspect a situation. But we are gradually seeing business travel coming back. 

BTN: What have you been hearing from corporate clients in terms of what they are looking for in an airline partner?

Antunes: Mainly they talk about discounts, but we try to shift away from the discounts because there is much more than discounts to a corporate deal. It’s kind of a narrow vision because the discount is based on the fares we have. If my fares are cheap and my discounts are small, I can be cheaper than the competition. If the competition offers more expensive fares and bigger discounts, even with those, they are much more expensive than we are. But we’ve also seen during [the pandemic] many of the corporate travel managers were made redundant, and many times we end up discussing travel with procurement, that procures everything for the company and has no idea what the fare is. If I get there and tell them I’ll give you a 15 percent discount, they say, ‘But I have 25 percent from your competitor,’ but we are comparing apples and bananas.

BTN: What plans are in the works, such as new routes?

Antunes: No new routes right now, but we are increasing our frequencies. Especially in San Francisco, we are going from five flights a week to six. It’s hard to work on corporate travel with less than five or six flights. We are really upgrading San Francisco in terms of proposition for business travel. We also are increasing Toronto. … We are continuing to increase our footprint in terms of the commercial team in the U.S., and our SME program will go through a revamp this year. 

BTN: What is the timing for that?

Antunes: That will be in the second half of the year. The brand is going to change, the look and feel of the overall product, and we will have a more responsive website. 

BTN: What are your plans for NDC?

Antunes: We don’t have it yet, but we will. We have a solid project for NDC already approved by the board. This is a topic that I’m not ashamed of not being a pioneer, where being a follower is a good thing. We will hop on the train with most of the functionalities already tested. We already have some aggregators that are on the phases of implementation and testing. But we didn’t want to launch NDC at all in any market until we had not only the first phase, shopping and ticketing, but also the reissuing, refunds and changes, with voluntary and involuntary changes, so that it’s a consistent product. … We have a strong roadmap and in the plan there is a phased launch in several markets for NDC.

BTN: Is that this year?

Antunes: Yes, 2024. For sure we’ll start with Portugal, but we hope North America will be in the second phase.