Lufthansa Technik increases revenue and earnings by more than 20 percent
Lufthansa Technik can look back on a very successful first half of 2023. After a strong start into the year, the world market leader in aircraft maintenance, repair and overhaul (MRO) had an even stronger second quarter. The half-year results show an overall increase of more than 20 percent in revenue and earnings compared to the same period of the previous year.
Earnings (adjusted EBIT) at Lufthansa Technik increased by 50 million euros to 291 million euros (+20.7 percent), the best first half-year in the company’s history. Revenue until the end of June was 3.1 billion euros (previous year: 2.6 billion euros, +20.8 percent). "We are continuing on our steady upward path," says Chief Financial Officer Dr. William Willms. "Of course there are still challenges, given the rapid ramp-up after the Corona crisis. But we are getting better at balancing issues such as inflation, material shortages, strained supply chains and skilled labor shortages with the needs of our customers. We mostly succeed in fulfilling the expectations placed on us. Among other things, our customers value our superior material availability compared to that of our competitors."
To make sure it stays this way, Lufthansa Technik is investing heavily in materials to safeguard the company's business for the future. One example here is the increased procurement of Used Serviceable Material (USM), i.e., used parts that can be refurbished and subsequently reused. This alone is where Lufthansa Technik's investments have doubled compared to the time before the pandemic. "Our strong personal commitment and creativity allows us to constantly improve the initial situation for Lufthansa Technik," says William Willms. These efforts are also rewarded by successful new business. As of late June, the company had signed more than 450 new contracts this year, and around 700 in total in 2022.
Demand has not only increased in specific areas, but for almost all of Lufthansa Technik's products. Since last summer, employees in the Aircraft Component Services segment have already been experiencing a steady increase in repair business. The increased travel at present is intensifying this trend. Lufthansa Technik's second major traditional business unit also has good news to report: Effective immediately, LEAP-1B engines can also be processed at the Hamburg site. This step is important because the Boeing 737 MAX engine is expected to account for the largest market volume in the future. Success is also evident in the digitization efforts across all segments which are transforming Lufthansa Technik at its core, but which will also have a positive effect on earnings in the triple-digit million range in the future.
The employees of Lufthansa Technik remain the decisive factor in exploiting market opportunities and assuming an even stronger pioneering role in the MRO sector than is already the case today. Successful recruiting efforts are therefore of corresponding importance. As of mid-July, the company has hired more than 1,250 new employees this year in Germany alone. More than 21,500 people now work for Lufthansa Technik. And more are steadily joining the ranks. This month, for example, more than 220 new trainees will start at the German sites.