More layoffs at Angola’s Airline: TAAG? Its CEO issues a statement. Read it here!

At a time when unofficial information is circulating about everything that has to do with the Angolan flag carrier, TAAG, Airlines, on Friday, the Chairman of the Board of Directors of that company, Ms. Ana Major, issued a statement providing clarification on this issue and others, this statement, which you can read in full in its transcript, below:

FLIGHT DT CHANGE 180° – COMMUNICATION FROM THE CEO

August 26, 2022

Dear colleagues,

It seems opportune to share some messages and considerations with all of you.

I am here on behalf of the Board of Directors to answer questions that concern the TAAG family, and above all to convey to you serenity and confidence. That’s why we decided in this communication to add a set of questions raised lately in non-formal channels, to which we will respond in order to keep employees properly informed, mitigating any type of speculation.

Thank you, therefore, for taking the time to read and reflect on the points presented here in a question-and-answer format, and I would like to ask all directors to ensure that all colleagues who for whatever reason do not have access to email receive the printed version. of this communication.

Was TAAG sold to a Spanish group?

No! TAAG is a SA entity (Sociedade Anónima) whose shareholder structure is composed of IGAPE 50%, ENNA 40% and the Social Fund for Employees and Workers of the Transport Sector with 10%.

Although the intention of the Angolan executive is public domain, the privatization of TAAG within a lot of other companies to be privatized, the realization of this process will depend on several conditions of the market context (global volatility in the post-pandemic) and the which it is up to all of us to do with a view to valuing the company and its assets. The ongoing process of transformation and restructuring of TAAG aims to enhance the company in the medium and long term, and it is premature to talk about the sale of TAAG.

Will TAAG in Portugal close and the Lisbon stopover will adopt the GSA format?

TAAG in Portugal will not close, but a minimum and essential core of TAAG employees will be maintained at the Lisbon scale. Like other international stopovers Spain / Brazil / South Africa, where TAAG has already adopted the agency model, Lisbon will also adopt the same model to replace its own offices, continuing its operation in the GSA (General Sales Agent) format. and with a minimum of collaborators. The Lisbon stopover will then be managed by an entity called Summerwind GSA. We are also safeguarding employees’ legal rights and treating them with the dignity they deserve.

Is the company that will act as GSA in Lisbon owned by a family member of TAAG’s Chairman of the Executive Board?

Not. It is important to note that «Soria» is a very common name in Spain. It’s like Silva, António or Costa in Angola/Portugal. There is no family connection between Summerwind CEO Federico Lledo Soria and our TAAG CEO Eduardo Fairen Soria.

Why did you choose the company Summerwind?

Summerwind has more than 25 years of experience in the fields of airline representation and a record of excellence in terms of quality of service and personalized customer service, having earned the trust of more than 15 airlines, as customers from different countries around the world. including in latin america where TAAG expects to grow.

Why was the SGA format chosen on international scales?

When analyzing TAAG’s cost structure, it was diagnosed that international scales in the traditional model (own office + staff) were quite onerous and inflexible for crisis situations (such as the Covid-19 pandemic) or market volatility, which is a feature of the post-pandemic phase. More recent studies have also validated that, taking into account the costs and benefits, the best option is to adopt the representation model through a GSA. The GSA model has already been successfully applied by TAAG in other geographies, namely in Brazil and South Africa where, like Portugal, a minimum essential TAAG team remains. The GSA model proves to be the most efficient format, with the greatest cost savings and the most agile way to deal with current volatility in foreign markets. The implementation of this model has brought very positive results in terms of business development, including higher revenue, more commercial attractiveness at stopovers and more efficiency in customer service.

Can the decisions taken by TAAG and with an impact on human capital be questioned?

We understand that it is legitimate for our employees to have concerns about the stability of their employment and about their future within the company. There is an employee who came to talk to me one day and said he was willing to make his place available if it would help to ensure the survival of TAAG and so that his grandchildren could one day know the place that made him a man. We hope it doesn’t take so much sacrifice. But the strategic decisions that are being taken by the Board aim to guarantee the sustainability of the company and adapt the teams and skills to the size of the current operation so that we can grow with a view to this legacy for future generations. In all matters and especially in matters related to human capital, all steps are taken within the legislation in force in Angola and in any other country where TAAG has operations. We intend to act in such a way that we are not questioned as to the legality of our management acts. This is why, within its organic structure, TAAG has the Legal Department, a new Human Capital committee and is implementing the new area of ​​Corporate Policies and the governance, control and compliance systems.

Is TAAG a company handed over to foreigners?

Not. TAAG is a company based in Angola, and more than 95% of its workforce is Angolan. It is important, however, to say that TAAG is also an international company with aspirations of growth on a global scale and implemented in several geographies. On the other hand, with the new airport to TAAG and with the implementation of the “Open Skies” agreements, there is a great challenge of internationalization and globalization to respond not only to privatization, but also to the aggressive competition that is already beginning to be made. to feel. As such, we accept diversity and respect all expatriate employees and consultants who temporarily work and contribute to rebuilding TAAG and do not condone expressions of xenophobia, racism and discrimination in any way.

Is TAAG a company handed over to foreigners?

Not. TAAG is a company based in Angola, and more than 95% of its workforce is Angolan. It is important, however, to say that TAAG is also an international company with aspirations of growth on a global scale and implemented in several geographies. On the other hand, with the new airport to TAAG and with the implementation of the “Open Skies” agreements, there is a great challenge of internationalization and globalization to respond not only to privatization, but also to the aggressive competition that is already beginning to be made. to feel. As such, we accept diversity and respect all expatriate employees and consultants who temporarily work and contribute to rebuilding TAAG and do not condone expressions of xenophobia, racism and discrimination in any way.

But if the Administration expects to grow, why is TAAG laying off cabin crew?

TAAG is not laying off staff, nor is it laying off staff from the PNC.

There are, however, a few employees (PNC) without a permanent contract, that is, with a fixed-term employment contract, having these contracts reached their expiry date, they were not renewed, in light of the legislation in force and with the due notice. This does not mean that they cannot be reinstated in the future when the operation grows and so is justified. Management is called upon to take management measures in line with good practices. It would not make sense at a time when we have to optimize the company’s staff to renew temporary contracts.

How did the TAAG Management receive Ms. Ondina Costa General Secretariat Union of Cabin Sailing Personnel (SINPROPNC)?

We understand that your ideas on the subjects mentioned in the social networks go beyond the scope of the Cabin Sailing Personnel to which the Union should be linked. We also note that his speech contains many personal opinions, assumptions, politicizations, untruths and lack of objectivity or lack of knowledge about the Company’s plan and the strategy that this administration is executing and trying to communicate both internally and externally.

On the other hand, your opinion of not dialoguing with the Administration certainly cannot be an opinion consciously assumed by the entire SINPROPNC, insofar as the union cannot abstain from its obligations of representation and defense of the constituents before the Administration only for not understanding Ms. Ondina Costa two work meetings were postponed.

Why is the TAAG Administration communicating with the SPLA-Sindicato dos Pilotos and the Union Bureau and not communicating with SINPROPNC?

TAAG’s Management is open to receiving all union forces and is firmly committed to actively listening to the concerns of our employees. A Labor Relations area was created in the Human Capital Department to address immediate and current issues and the Human Resources Director has already started regular contacts with the unions in this area, having met at least twice with SINPROPNC during the month of July. However, both the SPLA and the Union Bureau sent us Cadernos Revindicativos and we are having a very productive dialogue in this area, so we believe that we will reach solid and long-term commitments that can meet the expectations of all parties. Proof of this is the work meetings held with the Pilots’ Union where we exchange information, not only about remuneration, but also about the company’s financial results and about the business plan in the process of being finalized. This allowed SPLA to understand the reality of the company and what the Administration intends to do to change the course of things. We believe that SIMPROPNC and all Cabin Navigating Personnel (PNC) have the same interest and need for dialogue, as this benefits the entire class. As an Administration we are open and will work with SINPROPNC.

Essentially, it is important to say that we are available to carry out with the PNC Union the same line of constructive dialogue that we started with the SPLA and the Union Bureau, but we will not do this in the public square, but within the formal and corporate channels to the effect.

Is this board destroying the company?

No. We were able to finalize and audit TAAG’s accounts for the first half of 2022. The report and accounts monitoring the financial execution for that period is clear about the path we are taking. Overall, we can say that the Company is reducing its exposure to debt to key suppliers, reporting increasingly less negative results, as the commercial attractiveness and revenue is evolving favorably. At the operational level, we are growing in new routes, more flight frequencies, more business partnerships and recovering key certifications that expand our reputation with local and international entities.

Why were Hi Fly planes rented in a wet lease format? TAAG entered into an ACMI (Aircraft, Crew, Maintenance and Insurance) agreement with the airline HiFly for the leasing of an Airbus A330 for short-term periods (renewable) in order to ensure the continuity of the operation and the planned growth plan. (more frequencies and greater availability of aircraft), to the same extent that maintenance works that should have been properly and planned in advance are now taking place with part of the Boeing fleet. This type of agreement was the most agile, quick, and “turnkey” format to immediately respond to the emerging need to have aircraft available at a peak period in the market.

Why, instead of leasing HIFLY planes, which are models of planes that were never part of the TAAG fleet, Boeing 777-3ER planes were not leased, which do not require crew training?

The lease of a Boeing 773 was also considered. The leasing process would take longer in terms of time, as the planes would be delivered under dry lease (no crew included) counting on our crews. But that would cause us to miss opportunities during the peak of summer. Thus, and as the needs were immediate, we went ahead with the wet lease format, not least because it is a short-term rental at a competitive price.

What is the rationale behind choosing Airbus over Boeing for certain operations?

Our fleet decisions do not take into account just one factor, such as the crew. The financial conditions, operability and efficiency of the aircraft are some elements that we take into account. We have increased our credibility in the market and this allows us to negotiate with those who do not demand financial guarantees from the state, as we do not have the availability of financial guarantees that burden the Angolan state even more. This has certainly influenced decisions. On the other hand, it is important to note that the Airbus model has very interesting fuel economy rates, greatly reducing the cost of operation, they are equally modern, with considerable cargo space and have functional entertainment.

Will TAAG’s entire Boeing fleet be replaced by Airbus?

Not. TAAG will bet, in a pioneering way, on a «multi-brand» strategy by incorporating Airbus into its operation, together with Boeing and Dash. We have a very aging Boeing fleet (and even our passengers feel it), which is why it is necessary to prepare a phase out.

Is TAAG leasing Airbus planes and placing only foreign crew?

No. TAAG has entered into a commercial agreement with ALC (Air Lease Corporation) for the availability of 6 Airbus A220-300 aircraft with phased deliveries starting in August 2023. The operation of these Airbus A220-300 aircraft will rely exclusively on pilots and cabin personnel. Angola, as well as, maintenance management will be done by local teams.

Why is it investing in the cargo segment and what is the logic of using the Boeing 777-3R instead of the Boeing 777-200?

The cargo segment has shown significant demand and is a market niche that is bringing us revenue, which fully justifies our commitment and attention as well as the transition/use of some passenger aircraft to the cargo segment. The B777-200 are not yet fully operational due to maintenance and that is why we have been using the 773 to respond to customer demand.

Why switch commercial passenger flights operated by TAAG planes to HIFLY operated by Airbus for routes like Lisbon?

The rationale is that we need to allocate more aircraft to respond to the high flow of passengers in transit to destinations in Europe, with the Airbus A330 being a more economical aircraft for this connection. As this is a very competitive route with competition from other operators, it is important to be able to guarantee connections and at the same time obtain operational efficiency (cost reduction and fuel consumption rates). At the same time and strategically, the Boeing fleet will reinforce connections to Havana/Cuba and São Paulo/Brazil where there is no competition. It is, therefore, a decision that’s beneficial to TAAG.

Will the current TAAG board convert all 777 aircraft into freighters?

No. TAAG is not going to abandon its passenger transport activity, on the contrary, the idea is to continue to supply more routes and frequencies as well as increase connectivity with the rest of the world. For this we count on our cabin staff and crew. Negotiations are taking place at the moment and we will inform you about the news in due course.

Is your objective to transform the national flag company into a cargo-only TAAG, and offer our passenger routes to another company?

Never. Cargo has played an important role in the post-Covid context and TAAG is not the only company to bet more on cargo. But this under no circumstances takes away the value and affection we have for our passengers.

Will this board give up?

That option was not given to us. We have a direction for TAAG, and only one direction to go, forward! The challenges are enormous, but the team is prepared and capable. We count on everyone on this journey. We have to be aware that many of the decisions to be made will not be easy, but they will be essential for the Company to survive, as well as for the legacy that we all want to leave for the generation of tomorrow.

Be on board and watch out on this flight of change so we can reach our common destination and land safely.

Transpose, Transform and Transcend

Ana Major

Chairman of the Board of Directors of TAAG

2022.08.27

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