Aftermarket Reacts to Ukraine Invasion
Despite an encouraging 2021 for Lufthansa Technik in which it bounced back into profit, the German MRO provider has warned about headwinds from the Ukraine crisis.
Like other aviation service providers from the European Union, sanctions prohibit Lufthansa Technik from doing business with Russian airlines and companies.
Many of these were served via Lufthansa Technik Vostok, its 100%-owned Russia subsidiary, and it is thought that about 400 aircraft in Russia have some form of support contract with Lufthansa Technik.
Following its results, the German MRO provider forecast that the global MRO market would return to pre-crisis levels by 2023, although it would take until 2024 for the European, Middle East and Africa region to do the same.
However, that assessment could be affected by events unfolding, with Lufthansa Technik noting that the medium- and long-term consequences of Russia’s war on Ukraine are unclear.
"The war against Ukraine has shown us how fragile peace in the world is, and how quickly an order that was thought to be secure can fundamentally change. We very much hope that the war and the suffering of the people there will come to a swift end," said Johannes Bussmann, chairman of the executive board of Lufthansa Technik.
Elsewhere in the aftermarket, Rolls-Royce has stopped providing Aeroflot with engines, spares and maintenance services. It said that Russia accounted for 2% of its global revenues. Rival GE is also suspending its aviation services and supply to Russia.
French company Safran, meanwhile, has noted that that crisis will strain global titanium supplies for aircraft and engine production, and that it had begun to stockpile titanium as a result.
“VSMPO is our main supplier of titanium. They are Russian,” said Olivier Andries, chief executive of Safran. “Considering the situation in Ukraine, we have decided since the start of this year to buy stocks. And, indeed, we have increased our stock of titanium since the start of this year. So we have, let's say, several months in advance in terms of stock of titanium for our landing gears and for our engines. But we are going to accelerate also the other sources of titanium.”