Lufthansa Technik Philippines (LTP) has made its biggest single investment in the country with the construction of a new aircraft base maintenance facility in Clark, as it looks to take advantage of the country's growing maintenance, repair, and overhaul (MRO) industry.

LTP broke ground on Thursday, Aug. 6, for its second MRO facility in the country at Clark International Airport, with an investment pegged at a three-digit million-dollar amount.

Holger Beck, president and chief executive officer (CEO) of LTP, said the undisclosed investment is significantly larger than what the company spent on building up its operations in Manila.

Still, he said the company’s investment in Clark will be even larger in the coming years, as its current spending plan covers only the first phase of the new facility, which is set to open in 2028.

The first phase of the facility is expected to provide capacity for up to three widebody aircraft bays, including space for two Airbus A380s, the largest commercial aircraft in the world.

The second phase of the project will bring the facility's total capacity to nine widebody bays and is expected to begin construction in 2028.

“The second phase is roughly double the size of the first phase, so the investment will be double the amount of the first phase,” Beck said.

LTP plans to accommodate the widebody jets of local carriers Philippine Airlines (PAL) and Cebu Pacific, along with several foreign carriers, at its Clark facility.

LTP’s contract for its Clark site is expected to run for 25 years, with an option to renew for another 25 years.

Beck said expanding its presence in Clark is not part of the company’s efforts to replace its long-standing site at Ninoy Aquino International Airport (NAIA) anytime soon. He noted that its Manila facility, with its seven widebody bays, remains a strong pillar of LTP’s growth strategy in the country.

LTP earlier signed a long-term lease extension for its NAIA facility, ending months of speculation that it was looking to leave Manila altogether following an increase in lease rates after the takeover by New NAIA Infra Corp. (NNIC).

Beck said further expanding operations in the country is not off the radar for LTP, especially with the development of the New Manila International Airport (NMIA) in Bulacan, which is poised to become the country's next major gateway.

“Because of our business model, we just need the area where the airplane can land. But I would never exclude that we are not investing in Bulacan, it depends on the developments,” he said.

With LTP’s entry into Clark, Bases Conversion and Development Authority (BCDA) President and CEO Joshua Bingcang said another European MRO firm is now planning to invest.

At present, Clark already hosts the maintenance facilities of Hong Kong-based Metrojet Engineering Ltd. and Singapore’s SIA Engineering Co.

Despite slightly weaker demand due to the Middle East crisis, Beck said the MRO sector in the country has been gaining momentum as demand for air travel continues to grow.

“We believe here in the Southeast Asian region, the maintenance, repair, and overhaul demand for our business that we are offering will grow significantly," he said.

LTP is the joint venture between German MRO giant Lufthansa Technik and Lucio Tan-led MacroAsia Corp. (With James A. Loyola)