The Australian aircraft engine overhaul provider LTQ Engineering, which is based in Tullamarine, will cease operations and close its doors in September owing to the strong decline in engine overhaul demand. The closure was announced by the company, a joint venture of Lufthansa Technik (50 per cent) and Qantas Airways Limited (50 per cent), on July 26 in Melbourne.
"Reduced regional demand, tough international competition and more reliable new generation engines have directly impacted the viability of the business. Simply put, LTQ does not have the scale of engine maintenance work to be competitive," LTQ Chairman and Lufthansa Technik Chief Executive Officer, August Wilhelm Henningsen, said.
"Significant investment had been made in LTQ since the joint venture was formed and the shareholders had continued to support the business even though it had made consistent losses in each year of its operation. By taking the decision now while the company remains solvent, it ensures that all employees will receive their full entitlements and all obligations to creditors can be met. "
Lufthansa Technik advised Qantas that it could not continue to invest in the loss making Tullamarine facility.
LTQ Engineering's board evaluated a number of different strategies to address the continued losses, including winding down the company.
Considering the strong decline in demand and the company's business and outlook, LTQ is not financially viable. The joint venture partners have therefore decided to wind down production and close the company.
Marek Wernicke, LTQ Chief Executive Officer, said "LTQ would like to thank our staff for their contribution to the company. LTQ will provide support to the 164 affected employees including redundancy packages, outplacement support services and counselling.
LTQ has been in operation since 2004 - formerly under the name of Jet Turbine Services - before becoming a new joint venture between Lufthansa Technik AG and Qantas Airways Limited in 2008.
Winning 40 new customers and thus increasing its worldwide total to 691, Lufthansa Technik's total revenue for 2009 was EUR 493 million.
Turbine Services Pty Limited (JTS), the joint venture company in Melbourne, will provide technical support for GE and CFM56 engines in the Qantas fleet, together with Lufthansa Technik in Hamburg.
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...