Lufthansa Technik AG, continued its track record in international growth in 2016 and produced a fine result with considerably more investment. The decline in internal orders was overcompensated by the increase in revenue with non-group companies.
Sales revenue increased by 45 million euros from 5.099 billion euros to 5.144 billion euros. The company achieved earnings before interest and tax of 411.3 million euros. These figures from Lufthansa Technik AG and 22 fully consolidated companies were presented at a press conference.
“In 2016, we have cemented our position as the leading provider in our industry,” said the chairman of the Executive Board of Lufthansa Technik AG, Johannes Bussmann, at the announcement of the annual result in Hamburg. “At the same time, we were able to make important preparations for future growth.”
“Lufthansa Technik is commercially very stable. In particular outside the Lufthansa Group, Lufthansa Technik has continued its course of growth, and it has done so in a highly profitable way,” says Constanze Hufenbecher, chief financial officer of Lufthansa Technik.
“In view of the competition and price pressure, this is a very pleasing result.”
External revenue from outside the Group grew by eight percent to 3.5 billion euros. Revenue from group companies fell drastically, declining 11.7 percent to 1.6 billion euros, because of the finalisation of the modification programme for the Lufthansa long-haul fleet.
Revenue grew unduly in the growth regions of Asia and the USA. The extensive growth in revenue in the American market that was seen in 2015 continued unabated in 2016, with a growth of 14 percent and revenue of around 900 million euros. In Asia, Lufthansa Technik achieved even higher growth of 23 percent.
“This development demonstrates that our internationalization strategy is working,” says Constanze Hufenbecher. “This encourages us to continue along the path we have chosen.”
For the first time, the number of aircraft covered by support contracts with the company has exceeded the 4,000 mark; with a growth rate of twelve percent, a new record of more than 4,100 aircraft has been set.
In 2016, Lufthansa Technik AG acquired 42 new customers and concluded 456 new contracts with a revenue volume for 2016 and subsequent years totaling 5.7 billion
euros (previous year: 3.1).
“In 2016, following on from Finnair, we concluded long-term contracts for component supply with China Airlines and Ethiopian Airlines. This makes us the leading provider for this
forward-looking model,” stated Dr. Johannes Bussmann.
Lufthansa Technik also won more deals in the low-cost segment. Along with easyJet, the company is operating a maintenance hangar at London Gatwick, supporting the 55 aircraft stationed there. Apart from this, Lufthansa Technik Malta will carry out some 100 aircraft
overhauls for easyJet over the coming five years. The close partnership with WizzAir was extended in 2016. The A320neo and A321neo aircraft, new to the fleet, will also be supported by Lufthansa Technik.
After the successful implementation of regional sales structures, aircraft overhaul in
Manila, Philippines will be placed to serve the entire region. Component Services will get hold of a second mainstay along with Hamburg, with an Asian base in Hong Kong.
Apart from the massive expansion of its global logistics network new warehouses in London, HongKong, the USA, Düsseldorf, and Munich along with the launch of two
companies, Lufthansa Technik Component Services Asia Pacific and Lufthansa Technik Middle East, are the other decisive steps taken by Lufthansa technik to enhance internalization.
“This is a major step as we transform this globally active Hamburg company into an international corporation with strong roots in Hamburg,” says Bussmann.
Lufthansa Technik won long-term access to service crucial future engine models in 2016, with new cooperative contracts. Hamburg will be the centre for the new LEAP motor. With the XEOS joint venture, the company has successfully entered the overhaul market for the big new GE engines. Lufthansa Technik entered the service network for the geared turbofan after a strategic partnership with Pratt & Whitney. At the end of February, a contract was signed with MTU Aero Engines for the planned development of a joint engine workshop. N3 Engine Overhaul Services, the joint venture with Rolls Royce in Arnstadt, now also supports the Airbus A350 engines.
Lufthansa Technik invested more than 216 million euros in development to secure its future. Major areas inluded innovation and product development, new technologies, mastering new materials, the automation of repair processes, and digitalisation. The company established its new “Digital Fleet Solutions” division in Hamburg, Germany. Last year also saw expenditure of around 200 million euros to increase the material pool.
“The changing MRO market presents opportunities that we want to exploit early with new business models so that we can play a decisive role in shaping the industry,” remarked Bussmann.
