Lufthansa Group has dropped plans to divest a partial stake in its engineering unit Lufthansa Technik after unveiling a new long-term growth plan for the division.
Under its new Ambition 2030 plan, the Hamburg-based MRO unit plans to expand through a mix of investment in its core operations, increasing its international presence and developing its digital business. It says expansion of its international presence may potentially be achieved through acquisitions, while it sees particular long-term demand for engine maintenance.
Lufthansa has been divesting a number of its non-core activities as part of focusing on its main aviation business. While stressing that Lufthansa Technik remained part of its core business, it has since late 2020 been preparing for the possible partial divestment of a stake in the unit as a way of expanding the business by adding a partner with additional capabilities.
However, in unveiling its Ambition 2030 plan today, the group and MRO unit say they are ”convinced that they will be able to implement this ambitious programme under their own strength”. Consequently, plans to acquire a further shareholder in Lufthansa Technik are therefore ”not being pursued”.
Lufthansa says it expects a long-term increase in demand for repair and overhaul services, particularly in the engine sector. ”In addition to the increasing number of older engines in global flight operations, the higher maintenance intensity of newly developed engines is also contributing to this,” it says.
Lufthansa Technik chair Detlef Kayser says: “In view of the ongoing manufacturer problems - especially with engines - the strategic value of our Lufthansa Technik as an integral part of the Lufthansa Group has again increased significantly in recent months. We see this as a great opportunity to further develop our MRO division strategically with an ambitious growth programme and to further increase its profitability.”
The MRO unit generated revenue of €5.6 billion ($6.2 billion) in 2022 and expects to increase this over €6 billion this year.
Lufthansa Technik chief executive Soren Stark says: ”We have very ambitious goals for the coming years: We will invest in the expansion of our services as well as in the digitalization of our business and the expansion of our international presence. This will benefit our customers and our employees around the world.
”The airlines of the Lufthansa Group will continue to benefit from the intensive cooperation, direct access to maintenance capacities and the expertise of our employees.”