Lufthansa Technik Sees Immediate Coronavirus Impact

Credit: Lufthansa Technik

Lufthansa Technik’s strong 2019 reflected its strong standing in what was a buoyant commercial aftermarket before the novel coronavirus pandemic ground the global industry to a halt.

Last year was a cause for celebration for the German MRO giant as it posted both record revenue and earnings. The former increased by 13% to €6.9 billion ($6.4 billion) while the latter grew by 11% to €493 million before interest and taxes. New customer agreements numbered 25 and the MRO penned 625 contracts in total worth around €4.1bn.

However, since the spread of the coronavirus beyond China has led to many fleets being grounded worldwide, its impact has had a knock-on effect on the MRO sector. Lufthansa Technik says that the extent of the effects of the COVID-19-driven aviation crisis on the company cannot yet be concretely foreseen but states the impact has already been largescale.

“With the outbreak of the corona crisis, nothing is the same as it was just a few weeks ago,” says Johannes Bussmann, chairman of Lufthansa Technik’s executive board. “The maintenance industry is already suffering from the decline in air traffic. The full extent will hit us with a delay, which means a forecast is currently not possible, but first impacts are massive. 

Bussmann says there are several factors that will determine whether the industry is able to make a recovery. “Everything depends on the duration of the crisis and how our customers will recover from it,” he says. “We have prepared ourselves with a very comprehensive package of measures - also, to be able to deliver at any time.”

As of this week, Lufthansa Technik’s global network, which spans Europe, the Middle East, Asia-Pacific and North America, is operating at what it describes as a stable level. It says that although operations of individual facilities are affected due to local government-imposed actions, its global supply chain is coping with the current situation.

James Pozzi

As Aviation Week's MRO Editor EMEA, James Pozzi covers the latest industry news from the European region and beyond. He also writes in-depth features on the commercial aftermarket for Inside MRO.