Lufthansa Technik Revenue, Profit Up in 2008
By Frank Jackman and Lee Ann Tegtmeier
HAMBURG/WASHINGTON--Lufthansa Technik achieved an operating profit of 299 million euros in 2008, up 2% from its 2007 operating profit of 293 million euros, according to figures released by the company. The company's pre-tax profit for the year was 295 million euros, up 2.6% from 2007. LHT's full-year revenue increased 4.1% to 3.717 billion euros in 2008 from 3.571 billion euros in 2007.
"Naturally, the economic crisis will not stop at our gates, our customers are reducing their flights hours and utilization," said Dr. Peter Jansen, LHT's chief executive finance. "But thanks to positive developments in our new-customer business, revenues in the first two months of this year are higher than those for this period in fiscal 2008. And we are assuming that this trend will continue in 2009, if in a some-what weaker form."
Total expenditures rose 3.7% to 3.6 billion euros, although the cost of materials and services actually declined slightly (0.9%) due to process optimization and the "favorable development" of the euro/dollar exchange rate, the company said. Staff costs were up 1.9% as a result of a new wage agreement reached last summer with workers in Germany and an overall increase in the number of employees. The average annual workforce of the group's 20 consolidated companies increased by 466 people to 19,199. LHT Group has more than 26,000 employees across all of its direct and indirect holding companies, the MRO said.
Revenue generated by MRO work for Lufthansa Group carriers increased 8.3% to 1.5 billion euros, up from just under 1.39 billion euros in 2007. Work for Lufthansa Group carriers accounted for roughly 40.4% of LHT revenues last year, up from 38.8% in 2007. Revenue growth from third-party customers suffered as a result of the depreciation of the U.S. dollar, but was still up 1.4% to 2.2 billion euros for the year, the company said. LHT expects 2009 revenue to hold steady or continue growing, but anticipates that operating profit will be slightly lower than 2008's.
At LHT's annual media briefing in Hamburg, Jansen characterized the LHT group as a forest, with the five youngest trees contributing good growth in 2008, the year in which the newest members all started. Lufthansa Technik Switzerland contributed 18.4 million euros in revenues; LTQ Engineering, an engine overhaul joint venture with Qantas, logged 14.6 million euros; Lufthansa Technik Sofia logged 3 million euros; Lufthansa Technik Component Services Milan contributed 1.5 million euros; and Spairliners, the joint venture with Air France, logged 500,000 euros in revenue.
This compares to the five largest trees, which provided the strongest revenue in 2008. Jansen said these are Ameco Beijing (232.4 million euros); N3 (195.1 million euros); Lufthansa Technik Philippines (161.0 million euros); Lufthansa Technik Logistics (154.8 million); and Lufthansa Technik AERO Alzey (142.3 million euros).
Looking at 2009 operationally, LHT CEO August Henningsen said the company this summer plans to transfer A318 Elite completions from Hamburg, where the eighth aircraft is being work on now, to its Bizjet subsidiary in Tulsa. Next month, Lufthansa Technik Malta will expand its operation and will start doing larger checks for A330s and A340s. A Lufthansa A330 is there now, Henningsen said.
