INTERVIEW | Marcus Motschenbacher: ‘We remain the top brand and company on the island’

Lufthansa Technik Malta has just announced it will be investing €25 million in a new hangar in Hal Farrug. What kind of aircraft will be serviced in the new hangar and what kind of services will be carried out?

The new hangar will allow us to work on four wide-body aircraft (which fly transatlantic routes), together with five narrow-body aircraft (which fly continental routes). Therefore, in total, we will be able to work on nine planes simultaneously. At the moment, we can work on six aircraft at the same time, so we will effectively have the capacity to work on an additional three planes with the new hangar.

The new hangar will also give us the opportunity to re-design our operations. At the moment we have two hangars at two different locations which are opposite each other, where we work on four aircraft in one hangar, and two in the other. With the new hangar, the setup will change, and we will be able to work on nine planes – four wide-body and five-narrow body – in the same building.

In terms of the services offered, these are wide ranging. They start from relatively minor checks of five to fifteen days in duration, known as C checks, to heavy checks, which last up to 40 or 50 days, and are referred to as D checks. C checks take place every two years, while the heavy checks are carried out on six to twelve-year intervals.

We will moreover be carrying out cabin modifications for airlines that request renovations, such as new cabin layouts, rearranging seats,  galleys, toilets, and so on. We also put in place technological modifications, such as adding Wi-Fi or other electronic innovations to aircraft.
All the aircraft we will service will be Airbus models, including the A350 and the A320Neo.

With this latest investment, it is obvious Lufthansa Technik is comfortable – and satisfied – with its operations in Malta. Is this also your opinion? And why? What is attractive about the Maltese jurisdiction?

Lufthansa Technik is happy. We are doing a very good job in Malta, and 2019 was a highlight in this regard. Our Malta operation has registered a year-on-year increase in success in the last three years, which is definitely a good sign. Personally, I’m also very happy with the company and its performance, especially because we’ve become more efficient by 20% over the past five years and have increased our workload by almost the same margin.

The biggest factor which makes the Maltese jurisdiction attractive is the ability to have quick access to decision makers, be it Malta Enterprise, Malta Industrial Parks or the respective ministries – the Tourism, Transport and Economy ministries – all three of which are always helpful.

There are also other factors which make Malta a good destination for our operations, such as the degree of general expertise in aircraft maintenance and repair, its continental legal system, and the fact English is spoken as a first language on the island.

The country offers a stable environment and its geographical location is very central. Predominantly, our workload comes from Lufthansa the UK and continental Europe, but there is also an increasing reach into Africa and the Middle East, which puts Malta in a good position.

However, I should note that aircraft are very flexible, and, once they are in the air, if they need to go to a maintenance centre they can easily divert to another location that offers the same or similar services. Therefore, Malta’s location on the map shouldn’t be seen as a comfort because there is no domestic airline market which is exclusive to the island other than Air Malta, which is an important shareholder.

But this is only a small part of our business – the major part is imported from abroad, and these aircraft can fly to other locations to receive maintenance services. This is why it’s important that Malta ensures that within the network of all competing companies within the group and beyond it, it retains its number one position by remaining competitive.

Is Malta doing this? Is it making sure it remains competitive?

Yes, it is. We find open ears when we show interest in investing and expanding in Malta. However, we must consider that the country’s aviation community is expanding, and this puts pressure on all the players, not only those involved in the industry. This is why I will reiterate that we have to be careful to conserve Malta’s position for Lufthansa Technik, in that the jurisdiction and labour market remain attractive going forward.

How will the hangar expansion impact your current staff roster? Will you be seeking a new intake of trained staff?

The new hangar will require more staff. We are continuously improving our efficiencies, so a rise in efficiency will account for a relatively reduced requirement for an increase in staff. But we will still require a net addition of 40 to 50 people included in the 80 people a year who we recruit on average to counter for turnover.

When it comes to recruitment, Lufthansa Technik places tremendous importance on upskilling its human resources. We often recruit employees at a very junior age, and, together with MCAST, invest in their skills through training. We ensure that they develop the right attitudes and recognise the precision by which Lufthansa Technik conducts all of its work. This is important for us.

A lot of our employees’ career progression takes place within the company. Practically all leadership positions are taken up from within the company, which shows that those who start working with us have very good prospects for climbing up the career ladder with us.

Just the other day, we signed up 40 new junior recruits who will help make our strategy come true, and I’m looking forward to seeing many of these young workers progress within the company.

Skilled labour shortages are currently a problem across most sectors in Malta. Is this a problem you experience too?

We invest heavily in up-skilling our people and are also investing in tools which make the jobs of our employees easier. Apart from attracting new recruits, we find it just as important to retain experienced staff. But it is becoming increasingly difficult to find staff. And it’s no secret that with the expansion in the industry and the increase in aviation companies, people have more choice, and this puts an additional pressure on employers to differentiate themselves. I would, however, be confident enough to say that we remain the top brand and company on the island – and we’ve set a strategic target to keep our number one spot.

We’ve touched upon your positive relationship with Malta Enterprise and Malta Industrial Parks. Do you always find the required cooperation from these entities?

Communicating with the CEOs of Malta Enterprise and Malta Industrial Parks has been easy, and I have direct access to them. They offer a lot of help with any matters or issues which we bring to the table. I’d say their support couldn’t be better.

Last year the company was licensed by the German Federal Aviation Office (LBA) to carry out work on Airbus A350-900 aircraft. Two out of six base maintenance lines at your facility were outfitted to accommodate the A350-900 with an investment of over €3.2 million to cover the first C checks. How important was this certification for your Maltese operations?

It was very important, and I consider it the major milestone of the last three years. To be certified as one of the first movers worldwide – and certainly the first in the Lufthansa Technik group – to service the Airbus A350-900 and A350-1000 puts Lufthansa Technik Malta in a very prominent position, not only in the network, but also in the global market. The announcement of this certification has attracted a lot of demand and curiosity from A350 operators in the market asking when we will be in a position to maintain their aircraft, and to what extent.

In fact, we’ve already serviced both A350 aircraft types, having worked on one A350-1000 and two of the 900s in the last weeks. We’ve been equipped to work on these planes since October last year, but it took a while for the market to catch-up, and to some extent we were also already sold out. It was only from this year onwards that we were able to allow an intake of this aircraft, and we’re very happy to have taken them in and subsequently re-delivered them very successfully.

One should consider that there’s only 25 A350-1000s flying worldwide at the moment. And the A350 is the wide-body aircraft of the future, which in the mid-to-long term will replace the Airbus A340, which will see a decline in the next five to seven years. The ability to service A350s comes at the right time, just as it is about to become the successor of the A340, and in the future we will maintain a lot more A350s and less A340s. The same holds true of the A320Neo, which will replace the classic A320, albeit at a much slower pace. Evidently, we’re making the right investments here as well, in terms of being equipped to service this aircraft and making Lufthansa Technik future-proof.

It can’t all be plain sailing. What about doing business in Malta gives you the most cause for concern?

As I’ve mentioned, the labour shortage is probably the biggest challenge.

The infrastructure is good, although there are certain dynamics at play around the airfield, just as every form of infrastructure has its own dynamics in Malta. We’re curious to see how the aviation masterplan will develop, and we’d like to have more information and a say in it.

There are certainly possibilities for all aviation players in this regard, and I think drawing this up is an opportunity which could however present challenges until we get there. There is also infrastructural work going on at the moment which limits operations and flexibility, so that is also challenging.

Traffic is another issue, which to a certain extent is the result of ongoing road works. But at the same time the road works will eventually improve the situation.

To recap, I would say people and infrastructure constitute the major challenges.

How do you see the aircraft service industry growing in the next 10 to 20 years, and can Malta capitalize on that growth?

All the forecasts show that the airline industry in general, and its associated services, are going to grow. Malta is well-placed as a jurisdiction and from a geographical point of view to capitalize on this growth on a number of levels, including through aircraft leasing companies, which link the financial services and aviation spheres. The aircraft register, which keeps expanding, is another opportunity for continue growth.

I am reluctant to promote aviation areas which require skilled labour, however, because if finding people is becoming an increasing issue, Malta has to be careful not to “overheat it”, so to speak. Overheating – where certain sector areas grow too fast in relation to the available labour – would only mean disappointing investors. It’s not advisable to promise something, but then have investors encounter difficulties when finding people. Malta should ensure to continue preserving its reputation by not overheating and stressing the sector.

As to you personally, how happy were you to come to Malta as CEO of operations here? How do you find Malta? What do you like and dislike most?

I’ve been in Malta for just over three years. I consider my job the most beautiful in the world, and it offers everything I could dream of: it has production, it offers a tangible product, it has a good workforce and everything is in one building. On top of that I have access to decision makers.

I’m on the island with my family, and we like it very much. We love the positive elements of the country, such as the great weather and the proximity to the sea.

Regarding critical points, we’ve touched on the traffic already. And there’s other points, for instance I think more could be done in terms of keeping the country clean and thinking in a greener way.

But this has a mindset element to it which needs to be worked on, since it would help Malta to portray an even better image. With all the positive drive around the country, I think it’s normal that these challenges related to a growing economy come along.