Annual Report 2021
Return to profitability
Lufthansa Technik AG took a big step out of the pandemic-related aviation crisis during financial year 2021 and returned to profitability. The company achieved the turnaround through comprehensive restructuring, a clear customer focus and the further development of its product portfolio. Lufthansa Technik was able to increase revenue by 7% to 4.003 billion euros (previous year: 3.747 billion euros) and again generated a clearly positive adjusted EBIT of 210 million euros (previous year: -383 million euros).
“"2021 was another tough year that demanded everything from all of us. We have rigorously reorganized and restructured painfully, but today Lufthansa Technik is better, more efficient and more powerful than before the crisis. We owe this not least to the commitment and flexibility of our employees."”
Dr. Johannes Bussmann, Chairman of the Executive Board
The turnaround was centrally managed by the RISE program, which was launched as early as 2020. Its measures included a more streamlined organization with only five segments instead of eight business units, as well as structural changes that included the closure or sale of maintenance and overhaul sites. There were no business-related layoffs in Germany.
"The necessary measures, some of which were really tough, have deeply affected the core of Lufthansa Technik's identity. Nevertheless, I am relieved that we were able to spare our workforce the worst effects," Bussmann continued.
The 2021 result was still extensively supported by government aid such as the short-time working allowance in Germany. Another important driver of the positive development was a noticeable upturn in the maintenance business due to the recovery of global air traffic. The Aircraft Component Services business segment in particular, which is heavily dependent on the number of hours flown, felt the effects of this through significantly better capacity utilization in its workshops. In contrast, there was only a slight recovery in the engine business, with airlines still often taking advantage of the remaining "green time" service life of parked engines in 2021 in order to avoid overhauls.
However, order intake clearly shows that the industry is committed to working with Lufthansa Technik, especially in difficult times. Over the course of 2021, the sales organization won 42 new customers and signed over 620 contracts with a total volume of 4.7 billion euros. Among the new customers were numerous start-up airlines, which Lufthansa Technik supports with extensive expertise in setting up their technical operations. At the end of the 2021 fiscal year, the company had exclusive contracts governing over 4,200 aircraft operated by more than 800 customers. By focusing closely on the needs of its customers, Lufthansa Technik was able to nearly completely maintain its customer base throughout the crisis period.