Lufthansa Technik Moves Airbus Maintenance to Philippines

Lufthansa Technik will be the first European maintenance company to transfer a major business to Asia when it moves A330/A340 overhaul to the Philippines from Hamburg this summer.

"The transition will take one or two years to complete," Andreas Meisel, SVP for marketing and sales at Lufthansa Technik, told Show News. "It means we will not have A330/A340 heavy maintenance anywhere else, nor continue with it in Hamburg."

Asia is crucial to Lufthansa Technik's strategy to be a major player in the overhaul of widebody airliners in the region. It believes that heavy maintenance facilities for Boeing widebodies (at Ameco-Beijing) and the A330/A340 in Manila will allow it to take advantage of low labor rates to win business not only in the region but worldwide.

The second two of Lufthansa Technik's three Asian operations are just coming on stream as Asian Aerospace opens. They are:

o Lufthansa Technik Philippines, a 51%-49% joint venture with MacroAsia Corp., which took over the MRO operations of Philippine Airlines including its facilities for aircraft and engine maintenance, as well as component and aircraft overhaul.

o Lufthansa Technik Shenzhen Co., in Shenzhen, China, in which Lufthansa Technik owns 70%. The operation was officially opened on February 25 to service airframe-related components such as thrust reversers, engine cowls, and wheels and brakes. It will be one of three component shops integrated into LT's worldwide network, the other two being Hamburg and Tulsa, Oklahoma.

The third-and oldest-facility is AMECO Beijing, 40% owned by Lufthansa and 60% by Air China. AMECO lays claim to the largest maintenance hangar in Asia capable of accommodating four 747s simultaneously. China's largest MRO provider maintains and overhauls engines and components for Boeing 737s, 747s, 757s, 767s and 777s, as well as line maintenance for Airbus A340s.

"Asia is one of our target regions in growing our international network," said Meisel. "We are doing this through our three joint ventures in Asia, and by offering our own products in the market through regional offices in Beijing, Japan, Taiwan and Singapore."

Meisel said Lufthansa Technik believes Asia is the most efficient area in which to set up heavy maintenance facilities for widebodies, as the cost of ferry flights for the large aircraft is more than offset by lower labor rates (Lufthansa began sending its Boeing 747s to AMECO for D checks from 1997). But it makes no sense to try to attract narrowbody business here from Europe or the U.S. Therefore AMECO Beijing, while seeking international customers for widebody overhaul, will seek Chinese and regional customers for its narrowbody capabilities.

Lufthansa Technik's narrowbody heavy maintenance capabilities are now centered on its Shannon Aerospace joint venture with SRTechnics in Shannon, Ireland, and LT Budapest, which next month will begin D checks on Boeing 737s.

While directing heavy maintenance to its European and Asian centers, Lufthansa Technik still regards Hamburg as the center of its maintenance and VIP modification business. Last year it filled orders from 319 customers around the world and serviced 663 aircraft, including those of Lufthansa group fleets. Its 2.3 billion Euro turnover last year placed it amongst the world's leaders in MRO, with some 10% of the available (i.e. non-captive) world market share.

By John Morris