Lower income from Lufthansa Group carriers, in spite of consolidation of BMI and Austrian, contributed to a decline in revenues at maintenance firm Lufthansa Technik over the first quarter.

Lufthansa Technik attributes to "cyclical factors", notably fewer aircraft rest periods, the €50 million fall in revenues from the group's own airlines.

Its first-quarter revenues were down by 8.6% to just under €1 billion ($1.3 billion) for the first quarter of this year.

Consolidation of BMI and Austrian was reflected in 7% lower revenues -a total of €586 million - from external customer airlines.

Lufthansa Technik's operating result nevertheless increased by 16% to €71 million, although the company warns: "As the earnings position for airlines remains strained, there is even greater pressure on margins.

"New capacities on the MRO market are further intensifying the competition."

The business environment "remained tense", says the company. Capacity utilisation in the engine sector has "so far also remained down on the year" although the component supply market has grown.

Lufthansa Technik secured 196 new contracts in the first quarter, worth €227 million over the full year 2010.

The company says this volume "almost compensates" for expiring contracts and revenue from one-off activity in the previous year.

Lufthansa Technik has, for the first time, incorporated figures for its Rolls-Royce engine joint venture, N3, and its Airbus A380 component venture with Air France.

Earnings have also been lifted by better contributions from US parts firm HEICO and Asian venture Ameco Beijing, and the disposal of its loss-making division Alitalia Maintenance Systems.

Source: Air Transport Intelligence news