Lufthansa Technik unit revives $40-M expansion plan

One of the country’s biggest aircraft maintenance, repair and overhaul companies is pushing through with its $40-million expansion, more than a year past its original target, and eyes to rehire the hundreds of workers it was forced to let go due to the pandemic.

Lufthansa Technik Philippines (LTP) said it would complete the construction of its newest hangar in February next year, thinking the airline industry would already be in a better position by then. The company held the groundbreaking for this project, called Hangar 1A, in November 2019 and was targeting to complete it by September 2020, according to LTP president and CEO Elmar Lutter in a press briefing on Wednesday.

“The new target completion is February next year. We are pushing for the completion because we think the demand will come back sustainably. Of course, looking back in the [past] one and a half years now, we had one or two moments where we thought it was already over and it turned out to be a false start,” he said. LTP, which currently has 2,700 workers, hopes the expansion would be enough to bring its workforce back to 3,400, after the pandemic forced it to let go of about 700 workers through early retirement and separation arrangements, Lutter said. The project, which will provide base and line maintenance to various commercial aircraft, will add 25 percent to its total capacity. “At the moment, even after the rightsizing, we still have 2,700 employees. I hope that by next year we will go back to our old strength [of] 3,400 [workers]. We actually reduced by 700,” he said. The pandemic was not the only factor that complicated its plans. Back in October 2019, Lutter told reporters that the company might have to close operations because of the unbearably high costs that be caused by Citira, or the Corporate Income Tax and Incentives Rationalization Act, the previous version of a law now called CREATE. The CREATE law, or the Corporate Recovery and Tax Incentives for Enterprises Act, cut corporate taxes across the board and rationalized tax breaks. It went through a number of versions until it passed in March, after more than three years of uncertainty over what the fiscal incentive structure would be.