Transavia CEO: ‘Ultra-cheap flying is not coming back’

For 25 euros to Spain? Such cheap flights will not come back, says Marcel de Nooijer from Transavia Holland. Not so much because the low-cost airline no longer finds it possible due to the climate. But the costs are piling up, he says. From ticket tax and airport taxes to higher fuel and labor costs. And they make a ticket more expensive.

Transavia’s CEO calls the government’s decision to downsize Schiphol “dogmatic”. He believes new planes are quiet enough to allow Amsterdam airport to grow to 500,000 flights a year. And otherwise, Transavia will fly more from Brussels, as the tour operator Corendon also announced this week.

De Nooijer (54) has been the first man at Transavia Nederland, the successful low-budget branch of Air France-KLM, for three years now. In his office at Schiphol East, he calls 2022 “an eventful year with two faces”. On the one hand, people had “a very strong need” to fly again. “The recovery in aviation has been stronger than many expected.” On the other hand, starting up after the pandemic was accompanied by “a number of logistical challenges” at Schiphol. “Everyone has heard how this summer has gone.”

De Nooijer regrets that many passengers have been duped and that the problems slowed Transavia’s recovery. “Transavia Nederland returns a plus again this year after two heavily loss-making years – and that plus could have been much better. In any case, I am optimistic: the operational problems at Schiphol are known, they are being worked on, and I assume that we will have a more normal summer next year.”

In October, Transavia reported revenue for the first nine months of 2022 of 1.7 billion euros (one and a half times as much as in 2021); the gross profit was 13 million euros. In 2020 the loss was 125 million euros, in 2021 33 million euros.

At the presentation of the quarterly figures in October, Air France-KLM announced that Transavia suffered 55 million euros in damage due to the chaos at Schiphol. Do you want to tell those stories at the airport?

“Our estimate is actually that the damage since April 2022 is DKK 55 million. It is lost income and compensation to victims. We will discuss that with Schiphol. We make that claim, of course, with the idea that it holds up. Otherwise, you are doing something that is of no use to you.”

The airlines mainly blamed Schiphol for the chaos. Do you also blame yourself? In corona times, you fired people who you desperately needed afterwards.

“I think it’s a difficult question. During the pandemic, we said goodbye to 15 percent of our employees. Especially the cabin crew. We have now hired another five hundred people, so that last year we could fly at 95 percent of capacity in 2019. We succeeded. Transavia now has 2,100 full-time positions.

“We also have a delay effect from the pandemic: Absenteeism is higher than before corona. You can see that everywhere. We had to learn to deal with that in planning, for example. The lack of the labor market plays a role here in specific functions: technology and IT. It is nor are we unique in.”

Before the corona crisis, you decided to outsource ground handling, including baggage, to Viggo. That company had quite a few problems. Wouldn’t you rather have handled the suitcases yourself?

“No, as a low-cost airline, we are always looking for opportunities to be flexible. I think Viggo has done a good job in the whole context. Well, when is it perfect? They have done really well this summer.”

You call yourself an optimist. What do you base your confidence in 2023 on?

“For us, the most important test was: what do our passengers want? Since the start of the winter campaign in September, we have noticed that passengers also want to travel next year. Despite all the hectic pace last summer and despite the higher prices.”

Will the tickets become more expensive?

“Yes, we pass the higher costs onto the tariffs. Take the steep increase in airport charges that we have to pay Schiphol. And the significant increase in the Dutch eco-tax, from 7.85 euros to 26.45 euros per ticket. Plus the higher fuel costs and labor costs, also in handling.”

How much more expensive will a ticket be?

“I can’t really put a number on it. It’s different from each ticket, a matter of supply and demand. But obviously the tickets are more expensive than last year. We used to advertise with prices around 25 euros. That kind of money you won’t see again.”

Is the era of ultra-cheap tickets finally over? That’s what Michael O’Leary from your competitor Ryanair said in August.

“We do that now. I can’t speak for the competitors.”

You can fly less at Schiphol from the end of 2023. In June, the government announced a reduction from 500,000 to 440,000 flights per year. Do you understand that decision?

“An airline understands that it is part of society. You perform a service, but you must also be aware of what your activities mean for local residents. Our colleagues also live around Schiphol. The desire of the politicians to limit the nuisance is realistic. As an airline, you also have to work on that.

“But we were surprised by the decline, by the 440,000, by the planning. I have doubts about the dogmatic nature of a contraction of 12 percent.”

Dogmatic?

“We are already taking a very big step in making our fleet more sustainable. Transavia now flies with Boeing 737; we are switching to Airbus A320/321neo with Leap engines. The new units are almost 50 percent quieter. In addition, the engines are more economical ; which helps to reduce CO emissions2particles and nitrogen.

“We take our responsibility. But we also have to recover the investment of billions. Logical for a commercial company. A significant drop in growth does not help us with this.”

But that fleet renewal has been spread over many years. In addition, local residents fear that the ‘noise space’ that is released will be used for more flying. They haven’t helped with that.

“I think the maximum number of flights is still 500,000. It won’t be more. I think flying with quieter planes removes more nuisances than setting a maximum of 440,000, flying with older, quieter planes .”

Also read: Ministry: shrinkage is the only option to limit noise nuisance at Schiphol

The Ministry of Infrastructure and Water Management does not want to wait for quieter aircraft, the top aviation official said recently. Shrinkage is the only measure left to the government.

“You have to remove the nuisances that are real, but you also have to be aware of aviation’s right to exist. Free movement of goods and people has always been a fundamental concept in Europe. We really have a role to play in that. Too little emphasis is placed on the economic importance of aviation, for the Netherlands and tourism in the countries around the Mediterranean.”

Now you may be wondering what the importance of another flight to the same sunny destination is. Which destinations are really useful for the Netherlands? This issue is elaborated by the ministry in a note on the ‘quality of the network’ at Schiphol.

“It’s a very abstract question. This discussion about the so-called quality of destinations only takes place in the Netherlands. I think it’s a question for the airlines and their passengers. Not for others…”

Should the ministry not interfere?

“I think it’s a matter for the companies.”

If you are allowed to fly less at Schiphol, will you deviate elsewhere?

“We started in Brussels this summer. From Zaventem we flew to Ibiza and Heraklion, among others. Successfully. This winter we fly to Salzburg, Innsbruck, Tenerife and Alicante. We are looking at the possibility of offering more destinations from Brussels next summer. There is space because the party that was largest there [Brussels Airlines van Lufthansa], has been significantly reduced during the pandemic. Belgian travelers know Transavia; in addition, we also collaborate with the major tour operators.”

Flying is under fire. How much more difficult is it to sell plane tickets now than it was a few years ago?

“Societal concern about the climate and global warming is a given. It is also a given that aviation has a role to play. This is how we must contribute to CO2-reduction. The sector is responsible for 2 to 4 percent of carbon dioxide emissions in the Netherlands.”

But aviation’s share in this will increase in the coming years; other sectors are becoming more sustainable much faster.

“That is why we are hastening our fleet renewal. And that’s not the only thing. We also invest in the use of other fuels. If we could fly 100 percent further sustainable jet fuel [SAF, duurzamere kerosine op basis van gebruikt vet]you get 80 percent of our CO2emissions away.”

100 percent SAF, it’s not that far yet. From 2025, you only need to add 14 percent cleaner kerosene from the government. How much SAF are you mixing now?

“Next year we will go from 1 to 1.8 percent for all departing flights. The planes refuel here at Schiphol. We want more, but SAF production is not sufficient. In addition, the price is high. It was agreed in the coalition agreement that the ticket tax should be used to stimulate SAF use. It’s turned off. And that’s a shame. That money is probably used for other useful things, but it doesn’t help us.

“Flying is an amazing form of mobility. You need two kilometers of concrete [voor een start- en landingsbaan] and you can reach the whole world. It makes flying cost effective. But you have to work together to make it sustainable. We would like to take our responsibility for that. By renewing the fleet, by investing in SAF, by looking at other techniques. Think of flying on hydrogen for longer distances and electric flight for regional traffic. That is why we are also investing in the Dutch start-up for electric flight, Flywithlucy. Of course it’s still limited, with five-seaters in 2025, but we have to be part of that change.”

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