MEBAA Convention News

LHT expands capacity for widebody completions

 - November 10, 2008, 5:48 AM

Demand for VIP conversions of new widebody airliners, much of it emanating from this region, has impelled Germany’s Lufthansa Technik (Stand No. 410) to increase capacity both at its Hamburg base and at other sites on both sides of the Atlantic, according to Walter Heerdt, the maintenance, repair and overhaul (MRO) group’s senior vice president, marketing and sales.

Lufthansa Technik is a founding member of the Middle East Business Aviation Association (MEBAA) and Heerdt is a member of its board. “From our point of we view we appreciate how well MEBA is organized,” he said. “Especially with this region being such a mature market for VIP airplanes condensed into such a small area, it’s an absolutely vital contribution that MEBA has made.”

The first show, in January 2007, was “very successful, surprisingly successful from our point of view,” Heerdt told MEBA Convention News. “It was a very good show, there was a lot of interest and we were able to talk not only to potential customers but also to officials from the region.”

The Middle East, of course, is a long-standing market for VIP and VVIP airplanes. “It’s no secret that a major percentage of privately operated widebodies comes from this region,” Heerdt said. Indeed, LHT’s business relationship with some customers here stretches back 25 years.

The future is about new airplanes, though, and LHT is responding to a dramatic rise in demand for custom interior completions of Boeing and Airbus widebodies by expanding its capacity. The company has contracts to complete two Airbus A330s and two A340s by 2011, plus letters of agreement for three Boeing 747-8s and three 787-8s to be completed by 2018. It is also in negotiations with another six customers on 787 completions, and with five more who would like to have their 747-8s outfitted in Hamburg. Accordingly, it is preparing to inaugurate a third widebody completion line at Hamburg in 2010.

“We are also seeing a lot of inquiries for Boeing Business Jets and Airbus Corporate Jets,” Heerdt explained. “I wish we could handle more.” But the company is being careful not to take on more work than it can cope with. “In terms of space, we could open the third widebody line now, but we also need manpower in engineering and planning, as well as qualified labor on the shop floor,” he said.

To make room for the third widebody line in Hamburg, LHT is shifting some narrowbody completions to its U.S. subsidiary, Bizjet in Tulsa, Oklahoma, while newly formed Lufthansa Technik Switzerland will help by taking on VIP narrowbody maintenance work.

Bizjet previously had concentrated on Gulfstream, Falcon and Learjet completions, but it will have delivered three Boeing Business Jets by the end of this year and is due to start work on its first A318 Elite next May. A standardized VIP and executive configuration of the A318 for either 14 or 18 passengers, the Elite was developed in partnership with Airbus and has proved highly successful. LHT’s Hamburg headquarters has delivered three A318 Elites and has four more in hand. The single-aisle completion lines in Hamburg are fully booked through 2012, yet customer demand is still growing.

Lufthansa Technik Switzerland, the former Swiss International Air Lines facility at Basel-Mulhouse Airport, will provide technical support for VIP and corporate variants of the Airbus A320 and Boeing 737 families, plus regional aircraft operated by Swiss and other customers. The ACJ and BBJ work will not only compensate for a future decline in demand for maintenance on the Swiss Avro RJ100 regional airliner fleet, but is expected to require an expansion of the 500-strong workforce.

The Middle East market for both wide- and narrowbodies has remained bullish, according to LHT. “At some point in time it will flatten because you can’t have the current growth rate forever,” admitted Heerdt. But the arrival of new airplanes also means some operators will be disposing of their existing fleets, so there will be additional work required as those aircraft are refurbished for new owners.

“A lot of 747-400 owners are talking about a fleet rollover to the 747-8, or from the Boeing 767 to the 787,” Heerdt commented. “But the older airplanes won’t disappear, they will be operated by somebody else.” A few have changed hands already, he said, including at least two 747SPs and a few 747-400s
LHT’s portfolio embraces everything from straightforward logistic support to turnkey fleet management or technical training for operators’ own staff. And while VIP accounts are normally administered from Hamburg, “we have proven in the past that we will be there in six hours if we get the call, any day of the week,” Heerdt stated. “Lufthansa has a lot of flights to this part of the world,” he concluded.