Lufthansa Technik Budapest Pilots way Thru COVID Crisis

Transport

If the human cost of the COVID-19 pandemic is best illustrated by the now iconic medical face mask, the economic impact of the lockdown is perhaps best represented by the images of lines of aircraft parked on airport runways. You’ll see just that at Budapest Ferenc Liszt International, but ironically it still represents a hopeful outlook.

Speak to Matthias Gruber, CEO of Lufthansa Technik Budapest (LTB) and you soon realize that even at rest, aircraft are expensive and complex items. It can be “parked” for up to three months and still be regarded as “alive”, more or less ready to go. Anything longer than that and it is classified as storage.

“That means it falls asleep. The windows are covered up, the batteries removed, the engines covered and conserved, and all the holes in the airframe closed,” Gruber tells the Budapest Business Journal in an exclusive interview. “We like to say it is being kept in sleeping mode. This is not stand-by anymore, but of course we can technically wake up every aircraft within a few days”

A stored plane in sleep is no more left alone than a patient in an intensive care unit. Inspections and checks are performed every seven, 15 and 30 days. The wheels are turned to prevent deformation and to ensure they do not seize up, any built up moisture is removed. Aircraft are ventilated and operational system tests like flight control, hydraulics and air-conditioning have to be carried out. At this time of year in particular, when thunderstorms and higher winds are more common, ballast weight is added as required to keep the planes safely stored outdoors, in place.

There are currently 37 planes “stored” on a disused taxiway at Budapest Airport, another three at LTB’s facility at Debrecen Airport. The vast majority are from LTB’s parent company Lufthansa Group (whose most famous member is the airline of the same name, though it includes other carriers) and were flown in from Germany after lockdown started.

Record Number

“At first it was planned that more than 40 aircraft would be delivered from Germany. “Due to developments in aviation shortly before the summer, when more aircraft began flying again, we now have 40 here. We do not know how it will be in the next few months, because travel bans like there are now for Hungary influence the business of the airlines, but we hope that the grounded aircraft might be back in operation soon,” Gruber says. Even 40 aircraft, though, is a record number for LTB.

Initially, the aircraft were left where they had landed, parked along runways around the world as airlines were grounded and airports were forced to close. Once air travel began again, however limited, airports needed that space back and airlines needed to move these planes around.  

The basic deciding factors are cost of storage and the technical background to look after these valuable pieces of equipment. Hungary offers a competitive maintenance contract, at no loss of technical support. The customers know the planes can be reactivated in Budapest when needed, and any maintenance issues found can be dealt with to get them back in the air. It provides some work for LTB and also benefits the airport, which can collect storage fees.

“We had to make some quick decisions and find a new business opportunity in the chaos in order to secure the future of the company. In consequence it is a win-win situation: we generated some workload for LTB during this crisis. The airlines were able to store their aircraft safely and the airport utilizes available space.”

Getting the aircraft to Budapest was a logistical challenge, to say the least. The crews that flew them in were immediately isolated and checked for COVID symptoms. Once cleared, if there was no scheduled return flights, they were put on dedicated buses and taken to the Austrian border, thence to Vienna and from there, once they could find a flight, back on to Germany.  

It required close cooperation between the airlines, LTB, airport operator Budapest Airport, and the authorities. Gruber is full of praise for this community, describing a supportive “aviation family.”

Kurzarbeit Support

He also has praise for the support offered by the government, and especially its kurzarbeit or short-time working scheme. Gruber says accessing the money was complex, involving the HR department in putting together a 7,200-page submission, but LTB was one of the first to take up the three-month package, which covered an element of staff wages from May until the end of July.

“This was really helpful,” he acknowledges. “We achieved that people got governmental support, and we were able to reduce the working time. With this support, different business opportunities and further innovative measures, we could get through this crisis. To be honest, we weren´t profitable, but we were able to handle this situation in a proper way so that we did not have to lay off people or completely disrupt the company.”

Keeping staff was the number one priority, the CEO says. The company is committed to ensure the livelihood of its employees and their families. From a business perspective, this is also critical, since it can take five to eight years to reach the highest “B1” qualification for an aircraft engineer. That is a lot of investment in terms of time, effort and money.  

When Gruber joined LTB in May 2019, it was a challenge to find and train enough aircraft engineers to keep up with the workload. On the one hand he doesn’t want to lose what he has; on the other, he wants to be able to hit the ground running and take all opportunities possible once something like normalcy does return.

Staff were encouraged to take their holidays in August, but now virtually all 450 employees are back fulltime. September sees the start of the winter season, where more maintenance work is usually performed. Gruber estimates LTB will be back to 90% utilization though the winter. That said, the market is sure to face further upheaval.  

“We think our yield will drop significantly next year, because the market will change: less airlines, less aircraft. A lot of airlines are changing to younger fleets, which means less maintenance. That doesn’t affect Budapest, but it is an example: the four-engine aircraft will go and airlines will focus on more efficient twin engine aircrafts.”

More than that, air traffic has been at a virtual standstill for six months. The maintenance demanded every few thousand miles flown has been reduced greatly.  

“These maintenance tasks must happen in the future, but they are postponed. That might mean that some maintenance organizations will disappear, or maybe not, nobody knows. There definitely is a change; it will be a buyers’ market. That is what we are preparing for now. To get rid of processes we do not need, to reevaluate what is really necessary, what creats value for us and what the future customer needs will be.”  

Although this seems unsettling, Gruber and his team are trying to make the best of the situation. “We are planning ahead, involving our staff to lead the company to new successes!”

It is just the latest step in what has been an unprecedented period.

“To be honest, I think nobody has experienced anything like this. You cannot be prepared for such an impact. But CEOs and managers around the globe will be better, because they have learned how to handle such a crisis. I strongly believe that we will be able to cope with the upcoming challenges and strengthen our competitive position on the global aircraft MRO [maintenance, repair, overhaul] market.”

Matthias Gruber

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