BIZ BUZZ: Lufthansa Technik likely to stay in PH
Concerted efforts to keep prized investor Lufthansa Technik in the Philippines have apparently not been in vain, as the company has deemed the tentative new lease terms covering its vast 226,000-square-meter (sq m) space at Ninoy Aquino International Airport (Naia) “acceptable.”
Not to say, however, that the joint venture between the German giant and MacroAsia Corp. of the Lucio Tan Group is ecstatic about the exponential increase in their lease payments from some P60/sq m to P710 under the new working agreement.
Far from it, even as it adjusts to the reality that the original 25-year deal had expired last month and that the same terms would not be carried forward in the new agreement.
Biz Buzz sources said that Lufthansa Technik Philippines (LTP) indeed realizes that its lease rates will have to be adjusted to inflation plus the effect of the takeover of the country’s primary gateway by the San Miguel-led New Naia Infrastructure Corp.
However, it is still negotiating hard for some concessions to ease pressure on its finances.
LTP, for example, is looking to be exempted from additional fees that may be levied as part of the new structure at Naia, considering its importance as a provider of vital aircraft maintenance, repair and overhaul services and employer of about 3,200 workers.
That the higher lease payments seem not to be enough for counterparties, however, has remained a sticking point for LTP.
But then sources said that the Department of Transportation (DOTr) has made it crystal clear that it wants the finer details ironed out as soon as possible.
The government is indeed bent on keeping LTP at Naia, thus the urgent need to forge a mutually acceptable agreement.
That apparently was one of the last directives of Vince Dizon before he was moved out of the DOTr to solve much bigger crises at the Department of Public Works and Highways.
With that, the new lease deal that will be good for at least the next five years should be finalized sooner rather than later.
