Lufthansa - the World biggest commercial Aircraft servicing build $130 Million in the Philippines

World biggest commercial jet’s servicing expansion to the Philippines

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.

"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.

Lufthansa Technik Philippines in Manila will carry out heavy maintenance IL checks and painting for two Kuwait Airways Airbus A340-300s this May and September. The Middle Eastern carrier is a new customer for Lufthansa Technik Philippines.

The Manila MRO, a joint venture of Lufthansa Technik AG and MacroAsia Corp., says it has more than 20 A330 and A340 base maintenance customers. For example, it recently extended a C check agreement for AirAsia X’s Airbus A330 and A340 fleet, for which it does base maintenance as well, and it redelivered its first Swiss A340-300 following a base maintenance check.

In addition to Swiss, Lufthansa Technik Philippines provides base maintenance for the A330s and A340s of sister airlines Lufthansa German Airlines, Austrian Airlines and bmi.

Lufthansa Technik Philippines performed its 100th A330/A340 heavy check in December 2009 on an A340, since gaining overhaul capacity on the type in 2002.

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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Asia & the Pacific Led the Economy in the World but threaten by high food and fuel prices

According to the ESCAP study Dr. Noeleen Heyzer is under-secretary-general of the United Nations and executive secretary of ESCAP, and Dr. Nagesh Kumar is chief economist of the Economic and Social Commission for Asia and the Pacific, Bangkok.

China, India, the Philippines, Thailand & Singapore one of the leading countries boosting economic growth in Asia and the Pacific, more than any other region in the world, will experience greater transformation and change in the coming years, as the region’s economic strength plays a greater role in the global economy and as its population centers struggle to overcome the burdens of poverty, hunger, natural disasters and social inequalities.

The region’s economic growth figures,

Recently released in the “U.N. ESCAP Economic and Social Survey of Asia and the Pacific 2011,” indicate just how powerful Asia’s economy is for the world already.

The Asia-Pacific region recovered strongly in 2010 from the global financial crisis and recession of 2008-09 with the region’s developing economies growing at 8.8 percent.

In 2011, growth in developing economies of the region is forecast to be 7.3 percent ― lower than 2010’s high growth which represented a recovery from the low base of the 2009 recession.

Asia-Pacific remains by far the most dynamic growth region in the world, according to the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), and the locomotive of global growth. Its growth rate this year will be nearly one and a half times more than any other region.

While the region is led by the powerhouse developing economies of China and India, growing at 9.5 percent and 8.7 percent respectively, Philippine 7.3 percent,  growth in 2011 is broad based at more than 5 percent across Asia-Pacific’s subregions.

Despite these promising economic growth figures, Asia-Pacific still remains vulnerable to the risks posed by volatile short-term capital flows and the resurgence of food and fuel price inflation, and, as the tragic March 11 earthquake in Japan underscores, natural disasters.

High food prices have direct impact on the region’s poor. ESCAP estimates show that as many as 42 million additional people in the region are impoverished by 2011’s high food and energy prices.

High oil prices could significantly reduce economic growth ― lowering predictions by up to one percentage point for some Asia-Pacific economies in 2011, especially vulnerable economies are Singapore, Thailand, Philippines and India.

For the poorest and most populated countries, high food and fuel prices will slow the effects of high economic growth helping families out of poverty. Achieving the Millennium Development Goals for poverty alleviation by 2015 could be delayed by five years in many countries, especially in Bangladesh, India, Laos and Nepal.

Countries can take immediate policy steps to moderate the impacts of rising food and fuel prices on our region’s poorest people:

At the national level, lowering tariffs and taxes will reduce prices and social protection measures should be undertaken in the form of food vouchers, income transfers and school feeding programs to reduce the burden on the poor. Government buffer stocks of commodities should be utilized when market supplies are low.

Over the longer term, all countries must focus on enhancing support for agricultural R&D and rural credit for fostering a new, knowledge-intensive green revolution. Such strategies will not only boost food supplies, but will also assist the poorest communities, where sustainable agricultural development remains a reliable anti-poverty strategy.

Global initiatives, regional and subregional groupings should back up national strategies. The G20, the world’s major economic policy forum, could act to discipline speculative activity in food and fuel commodities and conversion of cereals into biofuels.

For oil price volatility, the G20, being the group of all major consumers, including eight members from Asia and the Pacific, may engage OPEC ― the group of major oil producers ― to demarcate a benchmark “fair” price of oil and seek an agreement to restrict oil price movements within a band around it, besides creating a global strategic oil reserve to moderate the volatility of oil prices.

Another challenge for Asia-Pacific economies is to generate more aggregate demand in the region to mitigate some loss of demand from developed economies as they restrain their debt-fuelled consumption. Inclusive development policies like poverty reduction and social protection can enhance domestic demand.

Furthermore, the emergence of Asia-Pacific region as the growth pole of the world economy means the importance of regional economic integration cannot be overemphasized.

The time has come to take a broader approach which focuses not just on deepening integration within subregions but also on fostering trade and business links to build a seamless Asia-Pacific economic space.

Working together, the Asia Pacific region can shape the forces of the present economic recovery by investing in its people, and by implementing social protections as a mainstay of national development. Asia Pacific is a leader in the global economy, and it now has the opportunity to safeguard the development gains of its people.

 

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