Lufthansa Technik Philippines to cut 300 jobs by April

MANILA, Philippines — Lufthansa Technik Philippines (LTP), maintenance provider to the world’s airlines, is cutting 300 jobs in April after the COVID-19 pandemic crippled the air travel sector and forced some of its airline clients into bankruptcy.

LTP is a venture between Germany’s Lufthansa Technik and aviation services firm MacroAsia Corp., controlled by billionaire and Philippine Airlines (PAL) owner Lucio Tan.

A leading company in the aircraft maintenance, repair and overhaul sector, LTP’s client list includes PAL and some of the world’s largest airlines.

The COVID-19 pandemic, however, has dramatically affected the business beginning 2020.

In a letter to employees dated Feb. 11, LTP president and CEO Elmar Lutter said the decision came “after careful study and consideration of the business situation as a result of the pandemic and its effects on the aviation industry.”

“As a maintenance, repair, and overhaul provider for aircraft, the significant fleet reductions announced by various (customer) airlines with some already in bankruptcy proceedings have a direct negative effect on LTP’s business,” Lutter said.

He explained the workforce reduction will include voluntary separation and potential retrenchment.
Eunice Gan, LTP manager of corporate communications, said in a text message on Friday the voluntary separation will take effect on April 1, 2021.

LTP will continue to employ 2,700 workers after the cuts or a reduction of 20 percent from before the pandemic.

The company had as many as 3,400 employees before the health crisis, however, around 400 workers decided to leave or were not regularized, Gan explained.

In his letter, Lutter also outlined the steps LTP took to keep workers employed and to shield them from the impact of the health crisis.

This included flexible work arrangements, additional and advanced leaves, face masks and vitamins.
Ultimately, Lutter said the move would “secure the fiscal health of the company to tide it through this critical period, and is considered temporary until our industry fully recovers.”

Even after separation, he said qualified employees may enroll in its “Salute Program,” which will keep skills and authorizations current for future rehiring.

“The program also includes assistance in skills training and consultation for those who wish to pursue new passions in the interim or for good,” Lutter said.

LTP’s flagship maintenance facility is located in the Villarmor Airbase next to Manila’s Ninoy Aquino International Airport.

Given once positive prospects in aviation, LTP started work on a new hangar to expand capacity in late 2019. The project, however, suffered delays due to the COVID-19 lockdowns.

LTP’s job cuts are the latest an industry roiled by the global health crisis.

PAL is set to cut 2,300 jobs by March this year in the single-biggest manpower reduction since the pandemic arrived in the country.

In 2020, Budget airlines Cebu Pacific and AirAsia Philippines also reduced their respective employee counts by 1,200 and 260.

Meanwhile, 1Aviation Groundhandling Services Corp., Cebu Pacific’s ground handling provider, also slashed 1,400 jobs last year.

EDV