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Home | Update | Latest Issue | Gallery | FR Profile | Datafiles | FR 8/97 LUFTHANSA TECHNIK EXPANDS ITS ACTIVITIES by Norbert Burgner The combination of an extensive technical know-how and the experience gained from operating a major airline, this, according to the Lufthansa Technik AG, is the special strength of the company. "Before, our achievement just consisted of maintenance and overhaul. Today, these tasks have significantly expanded. The work on the aircraft itself is only part of a continuously growing field. Instead of a sole technical support, we now offer our customers every possible service for their fleet including a complete management. This not only gives them the maximum usage of their fleet, but secures the long-term value of the aircraft", Lufthansa Technik AG Managing Director Wolfgang Mayrhuber explains at the occasion of the annual press conference in May in Hamburg. According to member of the board Gerald Gallus, this strategy allowed Lufthansa's 100-percent subsidiary to keep its ten percent share of the world market. The annual business report shows that Lufthansa Technik AG had a good work load in the second year of its economical autonomy. With 8,3 million work hours, the generated work grew by 3,4 percent, one of the growth engines being the business with customers from outside of the Lufthansa concern. This business has grown by 10 percent as measured in work hours. All together, 85 aircraft were overhauled at the docks in Hamburg and Berlin. Furthermore, 72 aircraft received a new paint in Hamburg. The engine shop overhauled 450 engines and more than 4000 engine modules. 68000 pieces of equipment and instruments were maintained. Concerning turnover and revenues, Lufthansa Technik generated a 15,7 percent increase (DM481 million) as compared to 1995. With a turnover of DM3.081 billion, the company passed the DM3 billion mark for the first time. While the business with the other Lufthansa subsidiaries shows a 7,7 percent increase up to DM1,776 billion, the business with customers from outside the concern shows an overproportional plus of 21,5 percent (up to DM1,09 billion), increasing the share of the non-Lufthansa business to 38 percent of the entire turnover. At the bottom line, the profit before taxes was increased from DM35431 million in 1995 to DM61524 million in 1996. However, due to internal tax calculations with the mother concern, the profits which flew back to the Lufthansa concern were 36 percent below the 1995 figures, explains Knut Wiszniewski from LHT's balance department. LHT finance head Gallus, furthermore explains that due to the high cash flow of DM253 million (DM188 million in 1995), all investments in the amount of 88 million Mark could be paid out of their own funds. The number of employees working for Lufthansa Technik AG, as of December 1996, increased by 40 to 10307. This number included 505 trainees. 127 of the 161 trainees who completed their training in 1996 received a full-time contract. 5400 (53 percent) of the employees are working at LHT's largest site in Hamburg, followed by Frankfurt (3400) and Munich and Berlin with each approximately 400 employees. About 550 people are working at the sites in Düsseldorf, Stuttgart, Hannover, Cologne, Nürnberg, Bremen, Leipzig and Dresden. The company bought a 60 percent share of Airmotive Ireland in Dublin to furthermore increase the international competitiveness. The new Lufthansa Airmotive concentrates on the overhaul of three engine models from two manufacturers (JTD8, JTD9, CFM56) and, according to Gerald Gallus, is improving LHT's cost structure, such securing German working places. Lufthansa Technik's engine sector now includes the sites in Hamburg and Frankfurt, along with Lufthansa Airmotive Ireland Holding Ltd., Lufthansa Shannon Turbine Technologies Ltd., and Lufthansa Aircraft Engine and Repair and Overhaul GmbH. The aircraft overhaul business includes the centers in Hamburg and Berlin, as well as, the Ireland-based Shannon Aerospace Ltd. (a joint-venture with Swissair). In China, LHT is cooperating with Ameco, a joint-venture with Air China. The product is rounded up by the subsidiaries Lufthansa Technical Training GmbH and Lufthansa Engineering and Operational Services GmbH. With this structure, the Lufthansa maintenance specialists are thought to be well suited for a future in which, according to Wolfgang Mayrhuber, "the aircraft operator concentrates on flying and leaves the technical support of the aircraft to Lufthansa Technik". In spite of the company's positive economical development, the LHT head is worried about a tendency on the market. He says it's not acceptable that aircraft or engine manufacturers (meaning Boeing and General Electric) break into the maintenance and overhaul markets, such being supplier and competitor for their own products at the same time. The goal being once again to try to bind the airlines in the long-term. Furthermore, Mayrhuber says that this market entry will probably coincide with higher spare part prices which is not a good omen. He says that, while competition is necessary and required, all parties involved should remember their responsibility and keep the balance between safety and economics. According to Mayrhuber, Lufthansa Technik's way into the future is pointing ahead. With its triple qualification as internationally renown maintenance, development and production company, LHT will play an important role in forming the development of the branch - of course as the market leader. From page 34 of FLUG REVUE 8/97 Home | Update | Latest Issue | Gallery | FR Profile | Datafiles | FR 8/97 Copyright 1997 by Motor-Presse Stuttgart. All rights reserved. Last updated July 4, 1997 FLUG REVUE, Ubierstr. 83, 53173 Bonn, Germany