Lufthansa Technik Philippines Inc. (LTP) on Wednesday said it has resumed the construction of a $40-million new hangar and is planning to rehire workers it laid off due to travel restrictions and dwindling passenger demand amid the COVID-19 pandemic.
At a virtual press briefing, LTP president and CEO Elmar Lutter said the company is banking on the the recent developments in air travel, wherein restrictions have significantly eased.
Lutter said the company “now finds that the demand is steadily picking up.”
Last year, LTP put on hold the construction of its Hangar 1A in Villamor Airbase, Pasay City to keep financially afloat.
The hangar expansion project was originally targeted to be completed in October 2020.
LTP broke ground for the new Hangar 1A in November 2019. The project is seen to create at least 275 jobs for Filipino workers who are experts in aircraft maintenance, repair, and overhauling.
Lutter said the company decided to fully mobilize the construction of the new hangar in September.
“So our decision was made at the end of August and the board meeting to unfreeze the additional investment to complete the hangar so we fully mobilized in September,” he said.
“The new target completion is February next year. We are pushing for the completion because we think the demand will come back sustainably… We think that the indications, which we have from the industry, show us that we will see recovery coming strong even in the first phase as many aircraft come out of parking,” he added.
Hangar 1A is LTP’s 4th hangar which can provide base and line maintenance to various commercial aircraft including Airbus A320, A330, A350, A380, as well as Boeing B777.
“The hangar alone is $20 million dollars, and all the ancillary buildings and tools related to full capacity is another $20 million,” Lutter said.
Rehiring
The LTP chief also announced that “rehiring will start soon.”
“We had to reduce to 80% [of our workforce]. I think we will cross 80% in the first quarter especially with the additional production capacity of Hangar 1A. We will start soon to rehire those mechanics,” Lutter said.
“We have 2,700 employees at the moment. I hope by next year we will be back to 3,400,” he said, noting that workforce reduction was a mixture of early retirement and voluntary separation and “also small portion of retrenchment.”
A joint venture between Germany’s Lufthansa Technik AG and Lucio Tan-led MacroAsia Corp., LTP provides aircraft maintenance, repair and overhaul (MRO) services to both local and international carriers. In short, the company’s business depends highly on the airline industry.
Established in 2000, the LTP joint venture’s equity structure consists of 51% Hamburg-based Lufthansa Technik and 49% MacroAsia.
LTP currently employs more than 2,000 Filipinos across its key sites nationwide, namely, Clark, Cebu, Davao, Kalibo, and Puerto Princesa. —KG, GMA News
Lufthansa Technik resumes construction of $40-M new hangar; to rehire laid off workers
Source: News Panda Philippines
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