Viewpoint

Lufthansa Technik’s strong 2015

German MRO Lufthansa Technik (LHT) reporting a full-year EBIT (earnings before interest and taxes) of €454m ($511m) for 2015 was an impressive pay off for an MRO that has focused its attentions on international and regional markets.

On top of its 20 per cent EBIT increase, the Hamburg-headquartered firm saw revenues grow 17.6 per cent last year to around €5.1bn ($5.7bn). External business was among its strongest performers, growing by 21.8 per cent to €3.3bn ($3.7bn) while revenue from its internal companies rose €1.8bn (€1.5bn) year-on-year, with Lufthansa’s extensive fleet modification programme cited as a factor.

Life hasn’t been easy for some of the MRO’s of Europe in recent times so factors which can help benefit firms in any way are obviously welcomed.

By LHT’s own admission, some of the “effects which were out of our control” including a stronger US dollar rate, worked to its advantage. These factors which contributed to its strong year are seen as something of an anomaly, with LHT chief financial officer Constanze Hufenbecher conceding it would be “a challenge to continue delivering such results” in 2016.

Looking closer at where LHT was successful last year shows its investment in emerging markets could already be paying off.

Activities in growing markets such as Central and Latin America, characterised by LHT opening the first two of five planned overhaul lines in Puerto Rico in July 2015 while also growing its presence in the Philippines, highlight its internationalist approach.

This appears to be a long-term strategy, with the targeting of growth in certain international regions something set to continue, according to LHT chairman Johannes Bussmann.

Speaking in the results released on Monday (March 21), Bussmann said: “The market is growing - especially in Asia and South America and our customers expect us to be close to them. We will therefore continue to further expand our international presence, so as to take advantage of the expected growth in international aviation.”

Closer to Europe, it has also benefited from the influx of next-generation aircraft, winning component MRO work for the A350 and the 787 operated by Finnair and Air Europa respectively.

While the firm has predicted a more modest outlook for 2016, with turnover growth expected to be accompanied by a decline in profit, it reaffirmed its commitment to keep on investing in areas of innovation and product development, including new technologies, materials and automation.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish