Rival MRO providers are not at the front of the queue to buy a stake in Lufthansa Technik, according to recent reports.

Citing sources, Reuters reported that parent company Lufthansa had drawn more interest from financial investors, while Handelsblatt said that talks with private equity firms could begin in December.

Their identity was not revealed, but several large U.S. private equity firms have been very active in aviation over the past few years.

Chief among them is Apollo, which has pursued transactions and financings connected to Air France-KLM, SAS and Atlas Air.

With Lufthansa reportedly seeking a valuation of its MRO arm of up to $8 billion, it may be that its sale of a minority stake is beyond the means of many aftermarket rivals.

Media reports also suggest that Lufthansa now prefers a private stake sale to a previously mooted IPO.

Speaking to investors earlier this year, Luftahnsa CEO Carsten Spohr said that the any sale would be for strategic reasons, noting that “bringing somebody else on onboard” would create “additional investment opportunities” for Lufthansa Technik—opportunities that its parent company, which wants to focus more on its core aircraft business, might struggle to provide.

In the second quarter of 2022, Lufthansa Technik contributed €112 million ($112 million) to Lufthansa Group EBIT, versus negative €120 million from the airlines, with Lufthansa noting that “demand for MRO and catering services is picking up again overall on the back of rising booking numbers, especially in North America.”

It added: “Lufthansa Technik’s business in the first half of 2022 was shaped by recovery from the coronavirus crisis, increasing demand for flights, and thus increasing demand from airlines for maintenance and repair services.” 

Management noted that strict cost controls had helped keep the rise in expenses under control—progress that will certainly appeal to private equity investors.

Lufthansa Group-linked activity grew fastest for the MRO provider, rising 75%, while third-party revenue increased 33% year on year. 

Nonetheless, third-party customers were still the bulk of Lufthansa Technik’s business, accounting for almost three-quarters of its revenue in the second quarter.