X Regional EACD Lisbon Debate over the topic "Going global: Managing Multicultural Effective Communication", 16th october 2012, presentation by André Serpa Soares, TAP Portugal

1. MANAGING AN AIRLINE
REPUTATION IN TROUBLED
GLOBAL SKIES
André Serpa Soares
TAP Portugal
October 16, 2012

2. 38-75: TAP doubled its network
Note: destinations in black were operated in 20002000 - 2011

3. Long haul
5 new destinations in Americas – Miami, Porto Alegre, Brasília, Belo Horizonte, Campinas
7 new destinations in Africa – Casablanca, Algiers, Marrakech, S. Vicente, Praia, Accra, Bamako
2000 - 2011
2000 2011
MPM
NYC
MIA
CCS
FOR
REC
NAT
BSB
SSA
BHZ
RIO
SAO
POA
GRU
FNC
LIS
RAK
CMN
ALG
OPO
LAD
TMS
ACC
OXB
BKO
SID
DKR
RAI
VXE
NYC
CCS
FOR
REC
NAT
SSA
RIOGRU
FNC
LIS
OPO
LAD
TMS
OXB
SID
DKR
JNB
MPM
12 new
destinations
in Africa
And Americas

4. Europe
27 new destinations in Europe: Seville, Coruña, Bilbao, Malaga, Valencia, Nice, Toulouse,
Marseille, Lyon, Bordeaux, Manchester, Oslo, Helsinki, Moscow, Warsaw, Hamburg, Dusseldorf,
Vienna, Prague, Budapest, Zagreb, Dubrovnik, Venice, Bologna, Turin, Berlin and Bucharest.
2000 - 2011
2000 2011
OPO
LIS
SVO
AGP
VLCMAD
TLS
BIO
BOD
BCN
MAN
LON
PAR
BRU
AMS
DUS
FRA
LUX
HAM
BER
CPH
OSL
STO HEL
MOS
WAW
PRG
MUC VIE
BUD
BUC
DBV
ZAG
VCE
ZRH
GVA
LYS
MRS
TUR
NCE
MIL
BLG
ROM
FNC
OPO
LIS MAD
BCN
LON
PAR
BRU
AMS
FRA
LUX
CPH
STO
MUC
ZRH
GVA
MIL
ROM
FNC
FAO
27 new
destinations
in Europe

5. América Africa Europa
Evolution nº Weekly Frequencies
Offered by TAP
HUB
Enhancement
From 2001 to 2011, total
weekly frequencies
offered by TAP
increased 217 %
2000 - 2011

6. 150%
100%
50%
0%
-50%
200% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
TAP
AEA
2000 - 2011
Traffic Growth (RPK’S) TAP and AEA airlines average – Evolution

7. 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
-30%
0%
30%
60%
90%
120%
150%
Europe Brazil
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
-50%
0%
50%
100%
200%
300%
400%
150%
250%
350%
Africa
-20%
0%
20%
40%
60%
80%
100%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
TAPAEA
TAP and AEA airlines average – EvolutionTRAFFIC GROWTH (RPK’S)
2000 - 2011

8. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
5,3 5,4 5,6
5,8 6
6,4
6,9
7,8
8,7
8,4
9,4
9,8
2011
9 752 000
+ 7,3%
YEAR
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
PASSENGERS (million)
5,3
5,4
5,6
5,8
6
6,4
6,9
7,8
8,74
8,4
9
9,75
2000 - 2011
Passengers carried
Million passengers

9. FLEET
2000 - 2011
2001
2002 2003
2004 2005
2006
2007
2008
2009 2010 2011
2000
35 35
38 39 41 42
64
67 69 71 71 7116PGA
16PGA
16PGA
16PGA 16PGA 16PGA

10. 2011
TRAFFIC

11. Portugal
Europe
Africa
USA
Brazil
Venezuela
Total TAP
27%
36%
6%
3,3%
23%
2,2%
9,1%
1,5%
0,2%
2%
0,2%2,3%
9%
MARKET Share Var
2011
TICKET SALES (€)

12. OPERATING
REVENUES AND
GAINS
10º
HUMAN
RESOURCES TAP,
S.A + PGA, S.A
FUEL
10º
2.479
EUR milion
7.561
Employees
716.867
EUR thousand
100,8%
5,4% -1,6%
3,7%
37,1%
359,5%
1.235
2.351
2.479
156.007
Total
Ground Staff
7.290
4.957
7.683 7.561
4.200 4.089
2000 2010 2011 2000 2010 2011 2000 2010 2011
522.933
716.867
1.015
724
295
USD p/ton.

13. Net income TAP,SA
-44
-6
19
2 4 2
54
-209
57 62
3
-200
-150
-100
-50
0
50
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011M€
-122
ProfitabilityCrisisProfitabilityConsolidationTurnaround

14. DEBT TO FINANCIAL
INSTITUTIONS
% Revenues and Gains (Total
Debt/ Total Revenues and Gains)
Total Debt
Net Debt
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
902
923 815
677 576 568 615 750
1.115
1.020 878 885
948 975
874
738
611
806
1.109
1.059
1.270
1.139
1.084 1.042
79%
78%
67%
61%
48%
57%
66%
54%
57% 58%
50%
46%
10^6 Euro
2011
0
500
1.000
1.500
2.000
2.500
0%
20%
40%
60%
80%
100%

15. Net Profit Margin
2.0%
(0.6%)
(0.5%)
(1.9%)
2.0%
(3.6%)
(2.8%)
(3.4%)
EBIT Margin
3.8%
0.5%
2.2%
0.5%
1.6%
(1.6%)
(2.5%)
(4.1%)
EBITDAR Margin
8.3%
5.4%
12.3%
11.3%
9.5%
9.1%
8.7%
8.4%
TAP HAS ON AVERAGE OUTPERFORMED ITS EUROPEAN AIRLINE
PEER GROUP IN TERMS OF PROFITABILITY OVER THE PAST
3 YEARS, DESPITE ITS UNDERCAPITALISED BALANCE SHEET
Peer Margins (2009 -2011 Average)
Note:(1) 2009 Pro-forma for British Airways and Iberia.
(2) TAP Group EBITDAR and EBIT include losses from associates.
(3) Lufthansa Passenger Airline Group financials for 2011.
Source: Company filings.
S.A.
(1)
SGPS (2)
(3)

16. TAP
AND
PORTUGAL

19. TAP PROMOTES
PORTUGUESE PRODUCTS
Portuguese wines served onboard TAP
considered of the best in the world
1 million bottles / year
6 of the most reknowned
Portuguese Chefs create meals
for onboard service
The best of Portuguese cuisine
onboard TAP

20. UP MAGAZINE:
SUCCESS IN PORTUGUESE
“Best inflight magazine”
Marie Claire Spain
“World best inflight magazine”
U-city-guides
“Best reading of the moment”
RES Travel Magazine
“A Must”
Monocle
1 million readers / month
The best bilingual vehicle in the
promotion of Portugal and Portuguese
tourism destinations

21. UNIFORMS: PORTUGUESE FASHION,
TEXTILE AND FOOTWEAR INDUSTRIES

22. PROMOTION OF PORTUGAL
Campaigns based on price
WEB actions with Google e Expedia

23. PROMOTION OF PORTUGAL
Campaigns to promote destinations
Press Trips

25. Europe
Brazil Africa
Portugal
LISBON HUB
IS CENTRAL

26. O CLIENTE MOSTRA O CAMINHO

27. SOCIAL MEDIA IS CHANGING BUSINESS

28. 2009: TAP FLASHMOB
AT LISBON AIRPORT
Over 2 million views
on YouTube
Many new fans to TAP’s
Facebook page

29. 2010
A VULCANO CALLED
EYJAFJALLAJÖKULL
It was quite a challenge!
Thousands of passengers grounded
Call centres overloaded
Desperate passengers turned
to facebook questioning airlines

30. THE BEST SOCIAL MEDIA LEARNING
PROGRAMME: "ON JOB TRAINING”
TAP replied delivering:
• Up to date info
• And the adequate answers to our fans
And gained a multi-disciplinary working team
with a good know-how

34. Sales
194 million
euro
2011/+34%

36. Corporate communications, Crisis management
COMMUNICATION & PUBLIC RELATIONS
Customer
Service
FACEBOOK
TEAM CALL
CENTRE
Dynamization
(promotion and
competitions)
MARKETING

37. SOCIAL MEDIA IT’S ALL ABOUT CARE
Customer
Service
FACEBOOK
TEAM CALL
CENTRE
Corporate communications, Crisis management
COMMUNICATION & PUBLIC RELATIONS
Dynamization
(promotion and
competitions)
MARKETING
listen
engage
No matter if
a fan likes or
dislikes us,
we want to

38. Gestão de crise e comunicação institucional
COMUNICAÇÃO E RELAÇÕES PÚBLICAS
Serviço
ao Cliente
FACEBOOK
TEAM CALL
CENTRE
Dinamização
(promoções e
passatempos)
MARKETING
SOCIAL MEDIA IT’S ABOUT HAVING CONVERSATIONS
listen
engage
No matter if
a fan likes or
dislikes us,
we want to

41. MANAGING AN AIRLINE
REPUTATION IN TROUBLED
GLOBAL SKIES
André Serpa Soares
TAP Portugal
October 16, 2012
afsoares@tap.pt