Lufthansa Technik Group Grows Faster Than the Market in 2007

In 2007, the Lufthansa Technik Group, one of the world's leading providers of technical services for airplanes, benefited from the growth in the global aviation industry and the maintenance, repair and overhaul market (MRO), once again posting improved results. Revenue from the Lufthansa companies grew slightly, while external revenue increased by 6.7 percent, which is markedly above market growth. Overall, revenue increased by 4.6 percent to 3.6 billion euros. The current 2007 Annual Report for the 19 companies that make up Lufthansa Technik AG shows an earnings before tax result of 287 million euros. This represents an improvement of 18.6 percent over the previous year.

"The Lufthansa Technik Group had a very successful year 2007, thanks to growing fleets and higher capacity utilization in aviation, but at the same time persisting competitive pressure in the industry," said August Wilhelm Henningsen, Chairman of the Lufthansa Technik AG, on March 13 in Hamburg. "We once again posted better growth than the world MRO market and were therefore able to strengthen our leading position." This is largely attributable to the group's modern range of products, global positioning and increases in productivity and efficiency.

In 2007, the number of customers of the Lufthansa Technik Group rose by 47 to 630 worldwide. Lufthansa Technik gained even more customers and achieved higher revenues than the previous year, winning a total of 465 additional contracts, equivalent to revenues of 440 million euros in 2007 alone. The percentage of customers from outside the group increased in the year 2007 by 1.3 percent to currently 61.2 percent. "We are in a good position with the innovative service products we make available around the world," said Henningsen. "And we can react swiftly and flexibly to changes in MRO demand."

Lufthansa Technik offers tailor-made services and support in building up technical operations particularly for new and fast-growing airlines making increasing use of Internet-based IT systems. And the development of new repair procedures is also contributing to a high level of acceptance on the part of the customers.

In addition to a strong position in Germany and Europe, Lufthansa Technik sees its international group with 28 production sites around the world - and a total of over 25,000 employees in the most important aviation markets - as a foundation for its good position in the further growing MRO market. "Our sales successes in the past year prove that this intensive international cooperation helps gain new customers and hence additional business for Germany," Henningsen stated.

As an industrial location, Germany, and in particular the company headquarters Hamburg, are not only centers of innovation and know-how for the Group, but also an interesting production location," Henningsen stressed. Further flexibility in scheduling working hours and increased efficiency through lean programs are paving the way for additional investments in Germany. In February 2008, for example, the cornerstone was laid for a new engine overhaul center. The annual engine throughput will increase significantly owing to the use of the latest methods and processes. More than 80 million euros is being invested in the Landing Gear Overhaul and Airframe Related Components business units, generating 125 new jobs. Also in Hamburg, a new research and development center dedicated primarily to cabin innovation is being built, this being a focus of expertise in Hamburg as center for the aviation industry.

In Germany, Lufthansa Technik in January 2008 opened its A380 maintenance hangar in Frankfurt. When the first A380 is delivered to Lufthansa in the summer of 2009, a maintenance base for this aircraft will be available at the Lufthansa hub. In the summer of 2007, an engine services joint venture with Rolls-Royce, N3 Engine Overhaul Services, launched operations in Arnstadt near Erfurt, Thuringia. In the meantime, it is servicing the Trent engines used in Airbus long-range aircraft. A new overhaul hangar is being erected by Lufthansa Technik Malta that will generate about 300 jobs during the next five years. And a new facility for the maintenance work on the Airbus A320 and Boeing 737 is being completed in the Bulgarian capital Sofia. Up to 380 jobs are being created there.

In Asia progress continues to be made on the 100-million-dollar investment program at Ameco Beijing, in the well-proven cooperation with Air China. The world's largest A380 hangar will be opened there in mid-March. Another hangar for widebody overhaul will be completed before the end of the year. And the Ameco Aviation College is also engaging in new construction in order to double its training capacities. In Manila, at Lufthansa Technik Philippines, a second widebody hangar for maintenance work on long-haul Airbus aircraft has become operational in October 2007. And in June 2007, Airfoil Services in Kuala Lumpur, a joint venture with MTU Aero Engines in Malaysia for repairing engine blades, moved to its new facility, which offers four times the floor space. A total of 250 new jobs were created here in a short period of time.

Given this backdrop, Lufthansa Technik sees solid opportunities to participate in the growth of the aviation industry around the world and to continue expanding its good market position. "With our modern range of products and our key presence in the aviation industry's established and growth markets, Lufthansa Technik expects a further growth in revenues in 2008," says Henningsen.

For further information: www.lufthansa-technik.com

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