Fresh off a year that saw revenues rise 10% to €5.9 billion ($6.7 billion), Lufthansa Technik (LHT) is looking to increase its investment across the business with further growth earmarked in its digitalization efforts and new facilities set for inauguration in 2019.
Speaking to the media in Hamburg on Thursday (Mar. 21), Johannes Bussmann, Lufthansa Technik’s CEO, says the company will make “intensive investments” across the business in 2019 – budgeted by LHT to stand at €265 million for the year. Last year, the German MRO invested €241 million into projects, increasing from the €233 million it invested in 2017.
Its Aviatar digital offering was launched in 2017 and having operated as an independent entity during the following two years, now has more than 1,000 aircraft on the platform. Bussmann says LHT has launched the Aviation DataHub, targeting airlines, manufacturers and MROs as well as data providers to use the platform to collect, compile and process technical or flight-operations data.
He stresses that the independently operated Aviation DataHub isn’t a substitute for Aviatar, instead it will “operate behind it” in the supply chain. As an open platform, Bussmann foresees partners joining the data hub and over time LHT wants to reduce its role as a sole shareholder in the business. However, any new collaborators have yet to be finalized and the process is anticipated to be an ongoing one.
LHT’s new facility plans are also gathering pace. This year will see two new joint ventures open in Poland. The first, an engine repair JV with GE Aviation operating as XEOS in Wroclaw, will receive its first engine—a GEnx-2B—next month. The facility will only repair engines sent by both of its JV partners.
The second JV with fellow German company MTU Aero Engines, known EME Aero (Engine Maintenance Europe), is on schedule to open at the end of 2019. The facility close to Reszow will service Pratt & Whitney’s geared turbofan engine.
Other locations are planned across Europe including a second facility in Hungary complimenting its existing Lufthansa Technik Budapest business, where it overhauls Boeing 737 classic and NG aircraft, as well as Airbus A320 family models.
Scheduled for a 2022 opening, Lufthansa Technik Miskolc, located in the north eastern city of Miskolc, will operate a a wholly owned subsidiary and will repair engine components. Bussman says LHT chose to add a second location in Hungary due to several factors, including workforce availability and its positive experiences through operating its Budapest facility for the past 19 years.
However, LHT has yet to decide which components on specific engine types will be serviced there, as the services will likely be insourced from repairs currently outsourced.
Having added 29 new customers in 2018, the number of aircraft under contract now numbers more than 5,100, Bussmann says. Of that total, 56 of these are the grounded Boeing 737 MAX, but the LHT chief says while there will inevitably be a loss in revenues due to their inactivity, this wouldn’t have a major impact this year due to the young age of the aircraft--meaning they are still in their warranty period.