Lufthansa bets big in Philippines jet servicing

MANILA, June 13, 2011 (AFP) - A hangar the size of two football pitches is rising at Manila airport as the Philippines bids to become one of the world's select few pit stops for the Airbus A380, the world's biggest commercial jet.

Lufthansa Technik Philippines is building the $30 million hangar, its third at the airport, to accommodate the new trend of larger aircraft, said its sales and marketing vice-president Dominik Wiener-Silva.

This photo taken on May 26, 2011 shows a passenger plane of Britain-based Virgin Atlantic airlines being repaired at the hangar of Lufthansa Technik Philippines in Manila. AFP

"What we're going to see is an increase in the average size of aircraft," he told AFP during a recent interview, adding that the industry overall was on an upswing after a difficult period.

The German firm hopes to cash in on the small group of carriers that have made the first 60 orders for the 275-tonne behemoths but lack their own maintenance facilities.

Only four sites worldwide can currently service the massive jet, which has a wing span of nearly 80 metres (262 feet).

"The Airbus 380 is a very large aircraft but it's not an unusually large aircraft," Wiener-Silva said. "The new hangar will be A380-capable. It will be large enough to have the largest aircraft in the world."

Set to be completed early next year, the new facility ramps up Lufthansa's capital investment in the Philippines to about $130 million, he added.

The core business of Lufthansa's Philippine unit is heavy maintenance.

Once every five or six years, jets are grounded for 25 days and are stripped to bare metal to get all their many thousands of individual parts tested for safety.

Britain's Virgin Atlantic is its biggest customer, along with the likes of the long-haul budget carrier Air Asia X, Cathay Pacific, Etihad, Japan Airlines, Korean Air, Qantas and Saudi Airlines.

Twenty other airlines also have their line maintenance at Lufthansa's expanding Manila base for Airbus aircraft as well as the ATR 72-500, the short-haul turboprop favoured by many budget airlines.

Line maintenance is a lighter, 24-hour safety check that regulators require once every 18 months.

Lufthansa offers other types of services at its 30-plus units around the world, including one in southern China that specialises in thrust reversers and other composite-material components.

"After some very difficult years in 2009 and 2010 we certainly see signs of an upturn," Wiener-Silva said.

"Airlines, especially in Asia, are picking up fast. We're actually seeing the strongest growth worldwide in the Middle East and Asia."

Aircraft maintenance accounts for about 10-12 percent of airline operating costs, and the local unit, the largest majority-owned Lufthansa unit outside Germany, has tidy revenues of about $200 million yearly, said Wiener-Silva.

But the 2,700-strong workforce -- almost all of whom are Filipinos -- is what makes the firm stand out, he said.

"In aircraft maintenance you will always encounter the unpredictable. It's not a standard production process and if you look for defects you require solutions," Wiener-Silva said.

"Filipinos are really passionate about finding the solution, getting the aircraft fixed and making the customer happy."

Wiener-Silva said the Philippines was unique in the region for its English-speaking population and extensive network of aviation schools that supply Lufthansa's local workforce.

"That is different from other up-and-coming countries like India and China -- you won't find that infrastructure," he said.

New graduates who go to work for Lufthansa Technik are put through the in-house training school, where they undergo a further 1.5 years of hands-on training before they are entrusted with the multi-million-dollar planes.

The unit sees new business in cabin modification, both for full-service carriers, which are keen on issues such as improving cabin amenities, as well as low-cost operators seeking to improve efficiency, said Wiener-Silva.

"Even a mechanic needs to be able to differentiate between a full-service carrier, where the cabin is the important part of the product... and low-cost carriers, some of which don't even have carpets in their cabins anymore."

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