Eduardo Fairen, CEO of TAAG Angola Airlines
On Thursday, November 10th I had the privilege to interview Eduardo Fairen. Mr. Fairen is the CEO of TAAG Angola Airlines. He has more than 45 years of experience in the aviation industry working for Viva Air, CAMAIR, Air Arabia Maroc, and Vueling Airlines. Previously, Mr. Fairen served as CEO of Viva Air Peru and co-founded Vueling Airlines. This interview has been edited for length and clarity.
Joshua Kupietzky: What is your background in the aviation industry?
Eduardo Fairen: I have been in the aviation industry since I was 17, and I'm now 63. You can do the math. I was in the Air Force for a while when I started flying. Later on, I joined the Commission of Civil Aviation. I have probably passed through all sectors, starting with corporate aviation, and moving on to regulations, regional, cargo in Europe, Middle East Africa, and South America.
JK: I know you founded the Spanish carrier Vueling and worked as CEO of Viva Air. How did you get to TAAG Angola Airlines, and how is TAAG different from your previous roles in the aviation industry?
EF: TAAG is not my first experience in Africa. I was in Africa during my time at Air Arabia Maroc and at DHL where we founded DHL Africa. Also, I joined Lufthansa in the project of Cameroon Airlines Corporation. Africa is a big piece of land and does not have a unique and uniform landscape because there are different parts of it. The markets are different, people are different, and the travel routines are also different. In my opinion, Africa has lacked for many, many years. There's a question of scale - a big thing in Europe and North America and has been solved before. There are a lot of companies, but they don’t have an asset of a size and scale in order to make this business successful. They don’t have the numbers or the capital. The aviation industry is a capital intensive industry in which having sites is important, not only to have enough financial resources, but also to get a good price and have leverage to find good prices. Additionally, the set of worries that we have here in Africa are different from the dimension parts I mentioned before. The exception may be South America where Africa shares some common elements, like high airport taxes and the cost of fuel. Those are challenges that affect the operation and also impede demand. Due to the costs and, obviously, the low income in many parts of Africa, aviation is only accessible to a small number of people compared with the total population. Also, bear in mind that here in Africa, travel is not a luxury; it is often a need as a result of health problems, the lack of connectivity, the large distances between different countries, and so forth. I think Africa is a place with potential for large development in the sector of civil aviation as soon the maturity of the markets is reached and as the GDP of the people increases. It is then that we will see African aviation taking off.
JK: TAAG, like all carriers, has retooled its network since the start of the COVID pandemic. What has worked and what hasn't? Do you see your network targeting more business or VFR (visiting family and relatives) travelers as you continue to emerge from the pandemic? What lessons have the pandemic taught you about its network and the mix of leisure and business travel?
EF: COVID has probably been the biggest crisis in the civil aviation world since it started. What I found was a company that had been through the worst part of the pandemic and had been stopped and grounded for a certain period of time. That has changed not only the landscape in Angola, but also in the region. Many companies have vanished and the market has been heavily affected due to COVID as well as the economic downturn that followed. The rebound of the market, up to the actual reference of 2019, is going slower than expected, and that is very visible in the whole industry. Markets that were very good and very profitable before the pandemic have almost vanished. After the peak of COVID, there was suddenly a higher demand for travel that showed the recovery, especially on economic terms. Certain countries are returning to normal quicker than some of those in Africa. Overall, we have reached about 60% of the numbers we had in 2019. Regular markets are generally slower than intercontinental markets, and the only one that shows a vigorous rise is our domestic market.
JK: I know you took over TAAG in the middle of the pandemic in 2021. What was the most difficult part of coming into the airline in the midst of such a crisis, and how were you able to help the airline survive the COVID pandemic? How were you able to find your niche and get the airline back into the market?
EF: The first exercise we did was to slim and shelf all unnecessary expenses in order to keep the ball floating. Second, we faced the same problems that some other companies have worldwide. Even though we have started service again, the rest of the airline industry is not running at the same speed, especially in Europe. The supply chain has been very difficult. All of the planning, including maintenance planning, was affected by the lack of supplies or the slowness of the delivery times because the whole world was trying to return to normal, but it could not be done in a single day. We have suffered heavily in some of those parts, and clearly, discipline, and trying to do the things as simply as possible, allowed us to return to the actual levels of service and to build an expansion plan. We have been able to start new services or new routes that were not considered before the pandemic because it is now a new world with new opportunities.
JK: As airlines emerged from the pandemic there was a shift towards more alliances and partnerships. I know you have codeshare agreements with carriers such as Iberia, but would you join one of these alliances completely, or do you prefer to have a foot in each of them?
EF: This is a process. Let's start with interline agreements. The question of the alliance is something that can happen in the future. However, let's focus on the basic work of building a big structure here. In order to gain size and numbers as well as to see the ability, all of these things need to be put in place before we consider joining an alliance. When people ask me what my preferred alliance is, I always say that I like the orange one because it is our color.
JK: TAAG has a new perspective on routes. It is more centered around Southern Africa. Was this decision a result of the available aircraft, or is it where you see the most market opportunity?
EF: We cannot forget South African Airways [SAA] still has relevance in the region due to its size and the maturity of their basic industry. The level of finance and the economic traffic that SAA had has clearly been affected by the pandemic and affects all of us. It’s a market that is recovering. It is true that SAA has been out of business for a certain period of time, but sooner or later they will return, and I think their traffic will be reinstalled. However, our strategy is not only focused on the Southern part of Africa as we are now linking four continents: Europe, Asia, and North and South America through Angola. Also, with the opening of the new Angola International Airport in Luanda, we will gain the tools that TAAG needs in order to increase our presence in our markets.
JK: Do you believe the hub and spoke model is more beneficial for TAAG, and do you plan on being more of a connection airport than a final destination?
EF: We have to work in hub and spoke because the connections that operators are given are very limited. To certain destinations, travelers can connect through Air France, Turkish, and other big carriers. However, there is a bigger region in the whole African continent that also needs connectivity. We are using measures so that the travel times from nearby countries coming here and going through here will reduce hours. To achieve this, we need to start building with sense and with good practices. Connecting travelers from different countries, knowledge flows through Luanda, and obviously the new facility will help us a lot towards their final destinations in South America or in Europe where they can also connect with Asia and North America.
JK: How do you view the main changes that have come about in the aviation sector because of the pandemic? What do you see as the main learnings that indicate things must change significantly for the benefit of TAAG and the wider aviation industry?
EF: Nobody was able to predict this crisis. It has offered us some lessons that we have to learn. The consequences for certain countries during the pandemic is that they lost their aviation and their connectivity. In certain moments, everybody was looking for vaccines and medical supplies, so sources became critical. I think this is something that needs some reflection as well as very deep thought. This is not just because every country has to have its own aviation, its own flag carrier. It is also because I believe more in alliances and agreements, especially with the size of the region and of the market that we can envision for the next 10 to 15 years. It makes more sense that monopolistic approaches, or things like that. In the end, aviation plays a social role in this part of the world.
Secondly the freight industry was almost disappearing. Many big players have now become relevant, rather than always having a certain level of installed capacity in the cargo sector. It's something that plays its social responsibility in a crisis like that. I will give a very simple example: TAAG has no cargo aircraft. We have transformed some of our actual aircraft to be able to carry cargo, and we are using our links to China, between China and South America, and we are able to perform actions such as the humanitarian flights they're doing to help Cuba that before was much more difficult to perform. I think of a certain level in which everyone should have cargo aircraft on the fleet plan of a midsize carrier. It plays its role because there are always circumstances in which we all need to have this. It is true that before the pandemic no one faced a similar situation, but I think, especially in Africa, cargo is something that has been lacking for years.
JK: I know there has been some talk about TAAG entering the cargo sector with pure freighter aircraft. How is that going?
EF: The problem now is that it is not dependent on us; it is dependent on the availability of the OEMs {original equipment manufacturers] because all production lines are plugged up until 2026. This gives us time to make decisions about it. Some of the bigger players, such as Ethiopian or LATAM, had freighter aircraft before. However, there are far bigger airlines than TAAG. I think we have time to think carefully in order to understand and to study what could be the need in the future for TAAG’s own operations, specifically in this new airport. Meanwhile, we have some rented aircraft, but they are working for us. There are also some others that have been transformed from passenger services to cargo services and will continue as such until we make the decision on those aircrafts.
JK: While TAAG serves some destinations in South America and Europe, do you plan on adding other destinations in future? Would you look at flying to North America or the Middle East?
EF: The Middle East is well served with the big players like Emirates, Qatar, and Turkish. I don't see any market that we may have there because those players do extremely well. They also offer a good product value for money. I think this is not our main point to look after. The United States is always desirable but we have certain legal constraints about approval certifications and so forth. Very soon we are going through an ICAEW audit that can clarify if flying to the United States will be achievable for us. And yes, we are looking for some other destinations, but we first want to work with what we have. We have increased our passenger services to Lisbon, Madrid, and Brazil. For cargo services, we are serving Hong Kong, Changsha and all the rest of the places that are working well. We want to have more, but we have to see how things are working. The numbers should say and speak for themselves.
JK: TAAG operates the Boeing 777-300 and 200 and the 737-700 and Q400. Do you plan on expanding the fleet and if so what aircraft are you looking at?
EF: The 737 fleet is becoming quite older, and it needs to be replaced. We now have, and we previously had, an agreement with Boeing about the 737-700 MAX. Regretfully, the 737-700 MAX is not in production - yet. We have chosen the Airbus A220 in order to substitute and replace our old 737s. They start coming into service in August of next year. As for the wide-bodies, we are determining if it makes sense to look after a new wide-body size that is larger than the 777-300 in regards to the market demand. With this under consideration, there has been no decision made. If something happens, we will announce it at the Paris Air Show.
JK: The government of Angola has decided to privatize the airline. What is the timeline on that, and when do you think the carrier will be privatized? Are you reaching out to groups such as IAG or Air France-KLM about interest in purchasing the airline?
EF: It is a desirable time for privatization, but there are two conditions that we need to achieve first. One is to have TAAG up and running, and this is the task we are undergoing. The second task is to find the right partner. There are some expressions of interest until now, but there's no decision. I think it's something that should be decided calmly and slowly. Because this is a big change, and you have to bear in mind that this company is not the only flag carrier, it is like a symbol in this country. In any case, I don’t think privatization will mean that the state will be completely out of the company. That is my vision, but as I said, there has been no decision taken.
JK: What are your goals for TAAG, short and long-term?
EF: Short-term and long-term goals are together. Our goal is to expand the company to a size that we can fit in the new hub. We want to have the hub start bringing direct connectivity and to become the preferred choice of carrier in this Southern side of Africa.
JK: We started this interview talking about your background in the aviation industry. What advice do you have for young people trying to start a career in the aviation industry?
EF: We are trying to get new people to join this industry, but there is a gap here, not only in Angola but all over the world. It is about the cost. There are certain jobs in this industry, the most visible ones being pilots, that are extremely costly as training is involved. There is a lot of talent that needs to join this industry as well. This includes mathematicians, IT people, engineers, and so forth. The investment in their training and basic formation takes years and also a great amount of money. Realistically speaking, all airlines need to invest more on people because this industry will very soon need to acquire a lot of young people. This is because there is one generation retiring, and there are not enough people to fill up the gaps that we will soon have. We obviously want to approach this with intensive recruitment, offering better opportunities and better salaries for people who are currently working in some other places. We also want to start a program of TAAG opportunities, in conjunction with the government, in which people will be chosen to join us. We will help them to support the cost of their training because they will be the next generation of TAAG members. However, it's something that should be spread out and also done in a way that will work. Everywhere you go, all airlines have this problem.
