With 737NG to A320neo transition, Transavia is also battling for capacity at AMS

Transavia, despite short-term challenges, which includes a looming shortage of slots at AMS, remains optimistic about its prospects
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Transavia Netherlands, part of the Transavia brand of the Air France-KLM group, has some turbulent but exciting times ahead of it. As it transitions from a full Boeing 737-800 NextGeneration (NG) fleet to becoming an all-Airbus A320neo/A321neo operator, the Dutch division of the low-cost carrier is also navigating the slot battle that is playing out at Amsterdam Schiphol Airport (AMS).

“We have taken a lengthy time during the pandemic to see what the main characteristics are offered by the new Boeing and Airbus [single-aisle] aircraft,” Marcel de Nooijer, the Chief Executive Officer (CEO) of Transavia Netherlands (NL), said in an interview with AeroTime at the World Aviation Festival 2023. According to the executive, its team assessed the economic capabilities and the sustainability offering of both the A320neo and 737 MAX aircraft families.

“With all these elements and observations, we came to the conclusion that the Airbus would be the right aircraft,” continued de Nooijer, alluding to the fact that the higher capacity of the A321neo might help the carrier to mitigate some of the impact that fewer slots at AMS could have on its operations overall. Upgrading the 737-800 with the A321neo means that Transavia goes from 189 to 232 all-economy seats, “adding significant capacity as a result,” the Dutch executive noted.

The low-cost carrier will be bolstering its fleet with both A320neo and A321neo aircraft, with the delivery of the first A321neo being just around the corner.

“We would like to [complete the fleet transition] by the end of 2030,” he said, adding that the transition will be completed base by base: first will be AMS, then Eindhoven Airport (EIN), Rotterdam The Hague Airport (RTM), and finally Brussels Airport (BRU). “That is quite an intense process, quite an intense transition,” the CEO mentioned.

Fighting against AMS capacity cuts

The intensity will be turned up a notch, at least for the time being, as the Dutch government has begun the process of reducing the number of total yearly slots at AMS. However, stakeholders affected by the measure, including Air France-KLM and by extension Transavia NL, have been fighting against it.

“It is no surprise that Transavia, is not in favor, which is why we have taken legal action against it,” de Nooijer noted. “But up until [that being resolved], we will have to deal with it.”

The Dutch executive noted that the move to reduce the airport’s total capacity by around 10% was intended to reduce the noise emissions. Yet the KLM group, which includes Transavia, has delivered a plan, “which has proven to have much better results driven by the fleet renewal and operational measures, as well as improving noise isolation of housing, which gives far better results,” according to the CEO.

De Nooijer expresses hopes that the European Commission (EC) “takes a real good look at the plan” presented by the group and sees that there are better ways of reducing the noise of airfield operations at AMS.

In April 2023, the airport’s managing company, Royal Schiphol Group, presented its own plan to reduce CO2 and noise levels at AMS.

The Dutch executive remarked that if the EC does approve the Dutch government’s plan, the impact will also be felt elsewhere. Firstly, it would set a precedent for other lawmakers within the European Union (EU) to follow suit. Secondly, it will impact the connectivity of the whole bloc, especially affecting the connectivity within the tourism-focused regions around the Mediterranean Sea, as well as Portugal.

“[There] tourism is an important driver of the economic engine,” he stated.

And while de Nooijer agreed that companies should have a contingency plan on the table, for now the airline is focused on ensuring that the EC considers its arguments. “That is the process we are currently in.”

“I really hope that [the EC] takes a good look at the strong arguments from the airline industry, which are models that independent auditors have calculated,” ensuring the models’ impartiality, according to the Transavia NL CEO. “They proved to be a much better solution without the dramatic change of lowering the slots [at AMS].”

Short-term challenges

Nevertheless, Transavia Netherlands has faced some interim challenges, including late-leased aircraft deliveries that have affected the airline’s financial result.

While the Air France-KLM group has ended H1 2023 profitably, the Transavia group’s result was in the red, despite an impressive (18.4%) growth in revenue. “We did have some operational challenges,” de Nooijer admitted. One of those was the late arrival of five second-hand Boeing 737-800s on lease. According to the CEO, they were supposed to arrive in preparation for the summer season in April 2023, but the latest came in July 2023.

As a result, “that created quite some challenges,” which included canceling some flights, impacting Transavia NL’s H1 2023. “Fortunately, we are now in calmer waters, as the fleet is complete again and I have better expectations for the second part of the year,” de Nooijer hoped.

Explaining that the outlook for the remains very good, de Nooijer added that he was “quite enthusiastic” about Transavia’s short-term future. Indeed, since mid-September 2023, the low-cost carrier has already been selling tickets for flights in April 2024 and beyond. “We have had much higher sales than ever before,” he continued.

“Dutch consumers are very willing to travel out of the Netherlands to beautiful places in Europe,” the CEO added, still alluding to the idea that the outlook could worsen if AMS reduces the number of allocated slots. The Dutch part of Transavia’s capacity is already slightly lower now than when compared to 2019, though that was because of the five Boeing 737-800 deliveries that were late, according to the CEO.

“We will grow capacity in 2024,” de Nooijer said, predicting that Transavia NL’s capacity will expand by between 6% and 8% in 2024.

De Nooijer is also a strong believer in the Transavia brand, including its commercial proposition onboard, as well as the “very warm approach of our crews toward our passengers”. Unlike other low-cost carriers, Transavia offers free hand luggage onboard and “excellent food choices”. The airline will continue to innovate and change its offering, including the launch of a pilot program to digitalize onboard sales. “By creating a fully connected environment via WiFi, people can not only order but also stream content,” differentiating Transavia from other no-frills airlines.

The Dutch native pointed out that the proof that this model works came when it launched the BRU base in 2022. “As of Day One, we had a load factor of above 90%,” de Nooijer explained. But he disagreed that these passenger experience changes have pushed the carrier into hybrid airline territory.

“I think you have to be sharp in innovation,” the CEO said. “Innovation can ensure a thrilling impact on the customer experience, but it can go hand in hand with a lower cost base,” he added. “[Innovating] does not mean you become less efficient.”

He emphasized that in today’s world, “you have to be keen on innovation” to differentiate your product.

Ever-changing market

However, de Nooijer expects the airline market to change within Europe, mentioning the term that has lingered over the continent for what seems like decades now: consolidation.

“I would say that it is a widely held opinion that consolidation will continue to occur,” the CEO commented. “Because while the airline business is beautiful, it is also very costly.”

According to the Dutch executive, consolidation enables airlines to improve their offers and products while still maintaining a lower cost base for major capital expenditure processes like a fleet renewal.

“Consolidation will be a theme going forward,” de Nooijer noted.

The current Transavia NL CEO previously worked as an executive within Air France-KLM Cargo, holding a managerial role at Martinair before he joined the Dutch branch of the low-cost carrier. Comparing the two, he observed that cargo is naturally “business to business” oriented, whereas he currently manages a consumer-focused operation.

“But there a lot of similarities, because it is about connecting destinations, managing capacity, which can be true for both cargo and passenger aircraft,” he said.

While de Nooijer diplomatically noted that he relishes his current role and enjoyed working with the cargo business, he jokingly added that “parcels have a tendency not to speak back” if they were unsatisfied.

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