Lufthansa Technik

Lufthansa Technik: Significantly Improved Even with Stagnating Revenues

As one of the world's leading providers of technical aircraft services, the Hamburg-based Lufthansa Technik Group was able to significantly increase its result in 2012 even with a slight decline in revenues to 4.01 billion euros. The annual report of the 23 consolidated Lufthansa Technik Group companies shows an operating result of 318 million euros.

"Considering the strained situation of many airlines, especially in Europe, the overcapacity in the maintenance, repair and overhaul (MRO) market and heavy pressure on price levels, Lufthansa Technik Group has developed very positively," said August Wilhelm Henningsen, Chairman of the Executive Board of Lufthansa Technik, on March 19 in Hamburg. Highlights of the year included the successful entry into service of the Boeing 747-8 at Lufthansa and the start of technical services for the Boeing 787. In addition, the Lufthansa Technik network with its 30 international production sites has been developed further, and the company moved forward intensively with research and development work as well.

"We were able to achieve this good result because many of our cost reduction measures are taking effect and we have been able to reduce the work required in many processes. In addition, a large number of new contracts contributed to our result in 2012," explained Henningsen. In order to secure the company's competitiveness over the long term, however, further measures to reduce costs and increase revenues have been introduced as part of the Lufthansa Group program SCORE, including restructuring programs in the larger production areas as well as targeted sales activities and more efficient administration.

"We have already implemented many innovations in production and optimized processes there, and we are now striving for similar improvements in administration." This area of Lufthansa Technik was analyzed by more than 200 experts from across the company with the objective of greater efficiency in all functions that are not directly productive. The reorganization of its structure and processes will mean the elimination in Germany of a prospective 650 jobs by the year 2015, of which approximately 400 are in Hamburg. The reorganization will be implemented in a socially responsible manner.

The development of the international Lufthansa Technik network in 2012 was marked by both portfolio streamlining and capacity expansions. LTQ Engineering in Melbourne, Australia was closed owing to lack of demand for services. Lufthansa Technik Switzerland in Basel will discontinue operations in April due to reduced demand for line maintenance services. In contrast, Lufthansa Technik Philippines is now offering comprehensive A380 services in its new widebody hangar in Manila, and Lufthansa Technik Sofia has doubled its capacity to five overhaul lines through a new complex of hangars.

Currently Lufthansa Technik looks after more than 730 customers and over 2,200 aircraft around the world. In 2012 the company won 45 new customers and concluded more than 500 new contracts. The total sales volume in 2012 from these contracts alone amounted to 480 million euros.

Lufthansa Technik enjoys a solid market position, according to Henningsen. "We will continue our course for growth, and set ourselves apart in the market through our quality, the strength of our innovations and our worldwide presence. And this market position will be solidified and expanded even more through the successful implementation of the SCORE measures. That is why Lufthansa Technik will emerge from the consolidation in the airline and MRO markets even stronger than it is today."

Lufthansa Technik:

The Lufthansa Technik Group, with more than 30 subsidiaries and associates and over 26,000 employees worldwide, is one of the leading manufacturer-independent providers of technical services for the aviation industry. Its portfolio encompasses the entire spectrum of services for commercial aircraft: maintenance, repair, overhaul, modification and conversion, engines and components.