Frankfurt — German airline group Lufthansa intends to retain full ownership of its aircraft maintenance division, scrapping plans to sell a minority stake in its Lufthansa Technik subsidiary, the company announced on Thursday.
Instead, the company said it plans to independently implement growth plans for Lufthansa Technik developed in recent months. Sören Stark, head of the division, spoke of "very ambitious goals for the coming years."
The Lufthansa Group, which owns several major European airlines in addition to its Frankfurt-based namesake carrier, has discussed a strategy to focus more on its core passenger flight business.
The potential partial sale of its maintenance division was intended to further that strategy. The entire unit is valued at around €8 billion ($8.7 billion).
In October, Lufthansa completed the sale of its in-flight catering subsidiary LSG group to the investment group Aurelius.
But Lufthansa Technik indicated that there has been a shift in the market for aircraft engines, which opened up new prospects for business at the division.
Manufacturing delays for new aircraft engines are expected to drive up the value of Lufthansa Technik, said board chairman Detlef Kayer. A new engine shortage would drive up demand for engine overhauls and repairs, as well as keeping older engines in service that require more maintenance.
Lufthansa Technik said the division is planning extensive investments in the business and an expansion of current locations. A new facility in Europe is also in the works, and managers did not rule out possible acquisitions to expand internationally.
Lufthansa also raised financial expectations for the division. Last year, the company generated revenue of just under €5.6 billion, or around 17% of the Lufthansa Group's total revenue, with around 22,000 employees worldwide.
Lufthansa Technik is now targeting revenue of more than €6 billion for 2023.
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