Lufthansa Technik expects the integration of Air China Technics into the Ameco joint venture to be completed by the end of this year.
The MRO provider’s CEO, Johannes Bussmann, said at the Singapore Air Show that integration work has been continuing for 10 months and is on schedule. Ameco has been operated as a joint venture of Lufthansa Technik and Air China with the German company holding a 49% stake and providing management expertise. As part of the integration of Air China’s other maintenance business, Lufthansa Technik’s stake has been reduced to 25%.
Bussmann believes the competitive landscape in the Asia-Pacific MRO sector will change as new aircraft and engine types have are introduced, and the overall market growth requires providers to make significant investments. “You need a lot more scale,” Bussmann explained.
Lufthansa Technik expects substantial MRO growth in the region based on the anticipated need to provide services for large fleets. The company is in talks with several potential large customers, which could give it a base from which to expand in the Asia-Pacific region. At its existing Lufthansa Technik Philippines facility, preparations are underway to expand capacity for A380 and Boeing 787 heavy maintenance.
Lufthansa Technik is watching Asian airline performance ahead of any further decisions. “The markets are really soft. Demand is good, but yields are really low,” Bussmann points out. He is concerned that a massive influx of new capacity could make trends toward lower yields even worse. However, “we will have to see whether all the deliveries to Asia will really take place,” Bussmann added.