The planned partial sale of the Lufthansa maintenance subsidiary is off the table. The division is benefiting from a crisis that is making life difficult for many airlines.
Lufthansa wants to keep all of its maintenance division. The company announced that the plan to sell a minority stake in Lufthansa Technik will not be pursued further. Rather, the growth plans developed in recent months should be implemented independently. Division boss Sören Stark spoke of “very ambitious goals for the coming years”.
The group actually wants to concentrate more on its airlines and thus its core business and had therefore planned to partially sell its maintenance division. According to earlier information from the Bloomberg news agency, a share of at least a fifth was in play. The entire unit was valued at around eight billion euros.
Financial investors are said to have registered interest in the spring. There are good reasons for the current pivot: Lufthansa Technik spoke of a changing market development for engines, which opened up new perspectives for the company.
In view of ongoing manufacturer problems in this area, the strategic value of Lufthansa Technik as a part of the group has increased significantly, explained the maintenance company’s supervisory board chairman, Detlef Kayser. Management expects a permanently increased demand for repair and overhaul services for engines. In addition to an increasing number of older engines in flight operations, the higher maintenance intensity of newly developed engines also contributes to this.
Help with engine problems
The engine manufacturer Pratt & Whitney, which launched an extensive recall of its geared turbofan engine in the summer, is currently having problems. According to previous information, Lufthansa has more than 60 geared turbofan aircraft. As part of the recall, 146 turbines across the entire group, including replacement engines, would have to be serviced, CEO Carsten Spohr said at the beginning of November. With the help of Lufthansa Technik, he wants to significantly shorten maintenance times. But the division is also likely to profit from the engine crisis as a maintenance service provider for other airlines.
Lufthansa Technik now wants to move forward and become more profitable with its own growth program called “Ambition 2030”. Comprehensive investments in the core business are planned, it said. Locations are to be expanded. In addition, the rapid construction of another plant in Europe is planned to be able to meet the increased demand. Acquisitions are also possible to expand the international presence. Lufthansa Technik also plans to expand digital business models.
Meanwhile, Lufthansa Technik is heading for significant growth this year. Last year, the company achieved sales of almost 5.6 billion euros with around 22,000 employees worldwide. That was around 17 percent of the Lufthansa Group’s total revenue. Lufthansa Technik is targeting sales of more than 6 billion euros for 2023.
Source: Stern
