Lufthansa Technik recorded its best sales result in the company’s history, with new orders totaling more than €13 billion ($15.9 billion). The results were announced in March at their annual media day event held at their product innovation center in Hamburg. Sales revenue grew €5.4 billion ($6.62 billion) up five percent over the previous year. The company achieved an adjusted Earnings Before Interest and Taxes (EBIT) of €415 million. These figures include Lufthansa Technik and their 22 fully consolidated companies.
“Lufthansa Technik is and remains the leading provider in our industry,” said the chairman of the Executive Board of Lufthansa Technik AG, Dr. Johannes Bussmann. “Last year was the year of sales. Our team delivered a fantastic performance, demonstrating the importance of the internationalization approach adopted by Lufthansa Technik.” He called competition in the MRO market “lively.”
According to the company, the number of aircraft under exclusive support contracts with Lufthansa Technik grew by a further ten percent in 2017 to more than 4,550. This is approximately 20 percent of all commercial aircraft worldwide. They plan to continue robust investments into the company. “Since 2014, we have almost doubled our annual investments to €233 million and we plan to pursue this approach further,” said Constanze Hufenbecher, CFO of Lufthansa Technik.
One dark spot on the year was the closing of the Hamburg base maintenance site which resulted in the elimination of 400 jobs. But Dr. Bussmann was optimistic saying, “There is a future for Hamburg – as an engine site. We will move forward with confidence.”
Last year, Lufthansa Technik established a digital fleet solution product division and introduced AVIATAR, a platform the company says offers numerous apps that can deliver a diverse, extensive range of digital maintenance, repair and overhaul (MRO) products and services. Bussmann said it will be like the iTunes or Amazon of the MRO industry, “keeping us competitive. WizzAir is the inaugural customer. They say AVIATAR will support customers “real-time and OEM-independent” in the management of fleet operations. Information is bundled and summarized at a single central point.
“We have made a very ambitious entry into digitalization with AVIATAR…we want to shape the digitalization of our industry with our modern fleet management solutions. With Wizz Air, we have already won an important AVIATAR partner with a large fleet from outside the Lufthansa Group,” said Dr. Bussmann.
Internationalization was also a key component to the company’s success last year Dr. Bussmann said, particularly in the engines division. The XEOS joint venture with GE Aviation, currently being established, has laid the foundation stone for the construction of a state-of-the-art maintenance facility for GEnx-2B and GE9X engines in Sroda Slaska, Poland. A contract has been signed with MTU Aero Engines to establish a new joint venture, EME Aero, also to be based in Poland. This company will have a future workforce of around 800 personnel to provide maintenance services for the PW1000G series of turbofans. The site for the Poland facility was announced a few days later as Jasionka (province of Subcarpathia) in the south-east of Poland. Lufthansa Technik and MTU Aero Engines, the two parties to the joint venture, say they will invest about €150 million ($184.3 million) in the region by 2020.
In Asia, the Component Services Division and the Lufthansa Technik Component Services Asia Pacific subsidiary have further extended the company’s presence in this important growth market. In Dubai, Lufthansa Technik Middle East is providing services for airframe-related components, AOG support, landing gear and engines.
The company remains committed to its growth in Germany, too. At the end of September, they opened a new wheel and brakes shop at the Frankfurt Osthafen site. They modernized the Hamburg corporate headquarters and added a new Center of Excellence for Engine Casings and a new x-ray center. Dr. Bussmann said they are making ready for LEAP engine overhaul and to expand component repair services with these steps.
The company believes it is well-prepared for the future. “Never before have we generated so much revenue, supported so many aircraft, or employed so many people. With this foundation, we will stick to our course: growing throughout the world and driving the entire industry forward,” said Dr. Bussmann.
— By Joy Finnegan