Aircraft maintenance, repair and overhaul are still the core activities of the Lufthansa Group’s technology subsidiary. However, other business areas are increasingly coming to the fore, especially logistics. This became clear at the recent annual conference of the German Association of Aviation Journalists (LPC) in Hamburg. LPC members were informed first-hand by Lufthansa Technik and Airbus about new developments and trends in aviation.
Harald Gloy outlined his company’s ambitions, initiatives, and strategic visions come 2030. “We are undergoing a fundamental transformation; it is ongoing, and its speed is accelerating,” the former Lufthansa Cargo executive and current Chief Operating and Chief Human Resources Officer of Lufthansa Technik dictated to the recorders of the 60 or so LPC journalists present.
Strong sales ambitions
His employer’s ambitions are clear: Lufthansa Technik aims to achieve a turnover of EUR 11 billion by 2030, compared to EUR 5.6 billion in 2022, andjust under EUR 8 billion in 2023. The margin is set to grow at a double-digit rate each year and the network of stations is to be expanded and thus become even more closely knit. This is to be achieved largely organically, although targeted acquisitions to foster strategic growth are certainly an issue. As was the case in AUG24, for example, when Lufthansa Technik acquired 80% in Tulsa, Oklahoma-based, ETP Thermal Dynamics, marking a significant step in the expansion of its aircraft component services portfolio in the Americas, and enhancing its heat exchanger capacity within its global network.
Various growth areas
According to manager Gloy, the transformation strategy is based on three pillars:
The company’s global leadership in traditional MRO activities is to be maintained and expanded in a targeted manner. Next on the agenda is the setting up of a station in southwest Europe, he indicated, without revealing specifics. Gloy went on to say that analog value creation models are to be replaced by digital processes, supplemented by AI and robotics. Between 200 and 300 projects are already underway, he added. And thirdly, new business models and products are to be developed in order to drive forward market development.
Since plans born during the pandemic to sell 20% of the shares and channel much needed cash into the empty coffers of parent Lufthansa Group, are now off the table, Lufthansa Technik does not need to take any external stakeholders into consideration when making investment decisions.
The focus is on logistics
Gloy sees considerable growth potential, particularly in the logistics business segment. Thanks to its subsidiary, Lufthansa Technik Logistik Services, the company is already well positioned in this sector. “Components worth around EUR 2 billion are in stock at our stations. Thanks to this inventory, we can ensure the end-to-end supply of our customers in the shortest possible time,” assures the manager.
Now Lufthansa Technik intends to become active in the defense sector. For example: by modifying military aircraft and providing component support. A collaboration agreement has already been concluded with the New Zealand Air Force. Further contracts for the tandem-rotor helicopter, Boeing CH-47 Chinook, ordered by several EU countries, could follow. The helicopter can transport 40 cubic meters of material over a distance of up to 1,000 kilometers. Germany has ordered 60 of the heavy transport helicopters in their most modern version. An efficient supply of components is essential for the long-term operational capability of the Chinook. However, Gloy made one point very clear. “Although we want to gradually expand the defense business, this does not include services for weapon systems.”
