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MacroAsia (MAC PM - US$161 million) is the leading aviation services company in the Philippines, with three major businesses:
- Maintenance, repair & overhaul (”MRO”) through its 49% owned JV ”Lufthansa Technik Philippines”, which provides airframe overhaul across its eight base hangars in the Philippines. It has a ~50% market share across international airlines and particular expertise in repairs of Airbus A380.
- Ground handling and aviation services (80% owned): Ground handling of aircraft in Manila, Cebu and elsewhere, including moving aircraft to the gate, baggage handling, check-in, aircraft cleaning, fuelling, etc.
- In-flight catering: Provides food & beverages to 15 foreign airlines (67% market share) and national carrier Philippines Airlines. It also has plans to expand into institutional catering through its new plant in the southern part of Manila.
It also has smaller businesses in water supply, sub-leasing a special economic zone at Ninoy Aquino International Airport in Manila and nickel mining services.
But overall, most earnings come from the MRO JV with Lufthansa. This JV has a unique competitive advantage in that it enjoys the technological skills of Lufthansa engineers and low-cost English-speaking staff in the Philippines.
MacroAsia grew nicely in the two decades up to 2019 by taking over contracts from competitors shut down by the government and provided to it by key customer Philippines Airlines (which now represents ~50% of revenues but a lower share of profits). Air travel to the Philippines had also been growing at roughly 10% per year, making MacroAsia somewhat of a long-term compounder.
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