LTP holds off $40 million hangar expansion until industry picks up

MANILA, Philippines — Lufthansa Technik Philippines (LTP) is holding off the full completion of its $40-million hangar expansion in Pasay City until the aviation industry picks up.

“We will complete the shell by the middle of the year and fully complete it when industry picks up,” LTP corporate communications manager Eunice Gan told The STAR.

“Given the nature of our business, we need to be agile and dynamic,” she said.

LTP previously suspended the construction of the hangar expansion to preserve cash in order to maintain its existing workforce.

The expansion, which will enable LTP to service more and bigger aircraft, started construction in September 2019 and was originally scheduled for completion in October last year.

“Prior to the pandemic, ground work was already prepared and materials ordered and delivered last year. It was a practical decision to utilize what we’ve spent and invested on already,” Gan said.

“Doing that will allow us to quickly complete it when we see the industry picking up, which we hope to be soon,” she said.

Prior to the pandemic, construction of the new hangar was seen as a very urgent endeavor for LTP given the boom that the travel industry was experiencing, which required a lot of planes to be maintained.

As a maintenance, repair, and overhaul provider for aircraft, LTP president and CEO Elmar Lutter said the significant fleet reductions announced by various customer airlines have had a direct negative effect on LTP’s business.

LTP’s workload has been significantly reduced due to less work requirement from its customers.

LTP, a joint venture of Hamburg-based Lufthansa Technik AG and Lucio Tan’s aviation support service provider MacroAsia Corp., announced last Friday it would implement a rightsizing program to secure the fiscal health of the company to “tide it through this critical period.”

It would reduce the size of its workforce to 2,700 or 20 percent lower than pre-pandemic.

Prior to the pandemic, LTP’s workforce stood at a little over 3,300, but this number declined due to non-regularization, retirement and resignation.