Lufthansa Technik Philippines (LTP) is looking into expanding its aircraft maintenance, repair, overhaul (MRO) services outside of Metro Manila, most likely in Clark, as business is back at robust pace amid high demand for travel globally.
LTP President and CEO Elmar Lutter revealed the company’s expansion plans on Friday, Aug. 19, during the inauguration of the $25-million LTP Hangar 1A at the MacroAsia Special Economic Zone in the Manila International airport.
“We are looking for expanding our footprint further and if you look around here, we have reached our limits here at NAIA. We will seek discussions with possible partners and explore possibilities in the Philippines and beyond with the end in mind to add affordable high-quality MRO to our region and deliver safety and reliability to our customers,” said Lutter in a speech.
The planned expansion outside of Metro Manila was also confirmed by Rainer Janke, LTP vice-president for marketing and sales.
Janke did not confirm though where they would expand but said that Clark is “very attractive” although the company also operates a small MRO facility in Cebu. Janke further said the need to fill up first its NAIA hub before they could embark on new project. He, however, expressed confidence to fully utilize its NAIA capacity because of the increasing demand for MRO services.
He said they might expand their services offering for Boeing from the current 777 and 737 to include narrow bodied aircraft and other different aircraft types. At present, LTP services cater to quite a good range of Airbus aircraft models from narrow body A320s, A3201, A330, A340 even up to A380.
According to Janke, business started coming back since August-September last year although MRO orders came from Europe and Middle East and not much from Asia Pacific.
The easing of travel restrictions has encouraged airlines to reactivate their aircraft. After being parked for the past one and a half years and receiving only minimum maintenance, Janke said these aircraft need to be checked to ensure their proper condition. “This is an opportunity for us and we are here in this new hangar at the right time,” he said.
He further expressed hope that the current high demand they are experiencing is going back to a level that supports the industry. “At the moment the demand is very high because people really want to travel,” he said.
The 9,000-sqm Hangar 1A hangar has added three lines to the existing 7 base maintenance lines to serve rising demand for its expert MRO services. It is expected to add 20 percent to LTP’s capacity and employ at least 275 more personnel, contributing to government efforts to arrest unemployment wrought by the extended health crisis. Hangar 1A will provide base maintenance for various commercial aircraft of short- to long-range capacities, including Airbus jets A320, A330, A380, and the Boeing 777.
Set for completion in September 2020, construction had slowed down when the pandemic triggered a travel slump amid global border restrictions. Janke said they also experienced difficulty getting workers onsite during the pandemic. The uncertainty and disruption during the pandemic had made it difficult for them to keep their normal timelines.
The inauguration of the Hangar 1A also highlights LPT’s 22 year of operation in the country, which Lutter cited as an excellent place for aviation with Asia’s oldest airline, Philippine Airlines, its tradition, infrastructure, and the depth and the breadth of its talent pool.
“Resilience has been invented here. We are optimistic to soon further grow our business again. This hangar shall be a milestone but not the end of the journey,” said Lutter.
Lutter also noted in his speech that the hangar is also testament of difficult trade-offs. He admitted of “initial panic” on their side during the process to shape the corporate tax reform, known as the CREATE law, that put LTP into the limelight. But this resulted in a compromise following constructive dialogue with the government, and some officials as he thanked representatives of the Department of Trade and Industry, Department of Transportation, Department of Finance, the Senate, and the House, for not tiring to entertain their concerns.
As there are still details to be ironed out, Lutter appealed to government officials to continue allowing them to speak up in the interest of the international competitiveness of the Philippine MRO industry.
“We started this year with full confidence in the recovery of the travel industry and aviation in general. And then clouds appeared again: inflation, regional conflicts, and again Covid. And although times are uncertain, I am optimistic. We will overcome the challenges,” he said.
For his part, DTI Secretary Alfredo E. Pascual said the DTI and the Board of Investments offer services and assistance that will ensure LTPs growth in the Philippines.
As we have learned during the pandemic, we cannot recover alone. We need each other to survive and thrive. LTPs growth is integral to our country's progress.
Strategically located at Manila’s main aerodrome, LTP has capacity to service aircraft coming to and from major international hubs such as Tokyo, Singapore and Hong Kong. A joint venture between Lufthansa Technik AG and MacroAsia Corporation, LTP is a globally certified provider of aircraft MRO services qualified by the European Union’s Aviation Safety Agency, the United States FAA and other airworthiness authorities from around the world. It currently employs more than 2,600 Filipinos across its facilities in Manila, Clark in Pampanga, Cebu, Davao, Kalibo in Aklan, and Puerto Princesa, Palawan.