We cannot lose our aircraft maintenance

Last Monday the Cebu Airport Corp. (GMCAC) celebrated its 5th anniversary, which they celebrated in JPark Island Resort & Waterpark in Mactan. Wow it’s been five years since we’ve known this group as the GMR-Megawide Consortium that bid out for the lease of the Mactan Cebu International Airport Authority (MICA). It took a few years before they were officially approved by the Department of Transportation (DOTr) and the Mactan Cebu International Airport Authority (MICAA).

It was only five years ago that we learned that the GMR-Megawide won the bid to run MCIA for 25 years, which then Sen. Serge Osmeña opposed simply because he was helping the rival bidder the Filinvest group, something no Senator should have openly supported. Honestly, I didn’t know a single person in GMR-Megawide, which was surprising to them, but I felt that it was wrong for a Senator to literally support a contender in that bidding, which we learned that he also brought into the Supreme Court. 

It was then that I met Andrew Harrison, GMR-Megawide’s top honcho, and learned more about the guy and the company he represented. I guess you can say that the rest is history. My reckoning was right on the dot when I supported this group. Of course thanks to Google, I learned more about GMR-Megawide and what they have been doing in India and Istanbul and their troubles in Maldives because of politics. More importantly, Andrew Harrison has become perhaps the most important Tourism promoter of Cebu with the way he sells Cebu to many foreign airlines.

Fast forward to a year and a half ago, when GMR-Megawide finally finished the Terminal 2 in June last year to the complete surprise of the people in the aviation industry that they have made Cebu Airport into one of the best airport terminals in Asia. As we already know, the construction of Terminal 2 was done from a blank space, so it was easier for GMR-Megawide to build a completely different terminal.

These days, GMCAC is working feverishly in refurbishing the old Domestic Terminal of Mactan. What I found truly remarkable was the way that the GMCAC has transformed our old MCIA domestic terminal, which is supposed to be inaugurated by end of November. The newly refurbished Domestic Terminal is now a pleasant place to wait for your flights to where you want to go. These are indeed great times for travellers to come to Cebu. As Andrew Harrison said, “People don’t usually want to go to the airport because they are not made to make the passengers comfortable. But here in Cebu, we want our passengers to come to the airport hours before their flight because they want to enjoy being in our airport.”

There is no doubt that the airport that we have in Mactan today was an idea we had 20 years ago that has become a reality. Mind you, when I was a private sector director of MCIA, aside from thinking of leasing the airport facility… we were also planning to bring in an aviation maintenance company, like what we have in NAIA today, called the Lufthansa Technick, Philippines. If Philippine aviation has to grow and we are definitely growing in the right direction, bringing in an aircraft maintenance facility is the way to go; more so that so many Filipino workers are employed by these companies.

I recall that during those days, some companies at the Mactan Export Processing Zone (MEPZ) did not want us to bring in such an aircraft facility simply because aircraft maintenance workers are paid much higher than what MEPZ pays its workers here. But

thankfully, Lufthansa Technick has started its operations in the Philippines. This has become a dead issue.

But there seems to be some bad news that I read a couple of weeks ago when I learned that Lufthansa Technick Philippines has been seeking for the retention of duty exemptions and warns of closing operations in the Philippines if the government’s second package of tax reform will pass in its current form. Apparently Congress is planning a new Citira Law, which stands for Corporate Income Tax and Incentive Reform Act (CITIRA). I just found out that in its current form, the MRO industry is not properly represented in the bill.

I also learned that Lufthansa Technick Philippines president and chief executive officer Elmar Lutter believes that MRO companies should still be exempted for duties for raw materials and spare parts under the Citira bill, further noting these incentives were currently being given by the Philippine Economic Zone Authority (PEZA).

I fully agree with this observation that spare parts of airplanes being repaired in the Philippines do not need to be taxed simply because airplane fly out to their respective countries. More importantly Lufthansa Technick is located within a special economic zone at the NAIA. The company also has satellite offices in Cebu and Davao that currently employs more than 3,000.

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