EBACE Convention News

LHT still sees solid demand for bizliners

 - May 11, 2009, 9:57 AM

The narrow- and widebody executive VIP completions market has been unaffected by the economic crisis, according to executives for Germany’s Lufthansa Technik. The Hamburg-based completions specialist has had no cancellations since the global recession began, and in fact has received three new letters of commitment from customers in the last six months.

“Interest in customized completions of large aircraft continues to be high,” said Walter Heerdt, senior vice president of marketing and sales for Lufthansa Technik. Despite the troubles in the business aviation industry, Heerdt predicted the market for large VIP completions will experience a “significant increase” in demand in the next several years. “We really don’t expect to see any drastic slowdown in the executive VIP market because of the crisis,” he said at a press conference here yesterday.

The surging narrow- and widebody VIP completions market will bring in $2 billion in revenue across the industry in the next five years, plus another $1 billion related to maintenance costs for large VIP airplanes, Heerdt said. Slacking demand among corporations and individuals for narrowbody airplanes like the Boeing Business Jet and Airbus Corporate Jet, he added, will be offset by sales of widebody head-of-state aircraft, especially in the Middle East.

Delays at Boeing on the 787 and 747-8 programs, however, present the VIP completions industry with significant challenges as slots are rearranged to accommodate shifting schedules. The only slot postponements, in fact, have been related to these delays. Order cancellations and deferments by airlines, however, could open up 787 and 747-8 delivery positions for head-of-state customers eager to take delivery of their aircraft as soon as possible, Heerdt said.

Lufthansa Technik employs around 1,200 workers at its main base in Hamburg and hundreds more at completions centers in Berlin, Basel, Switzerland, and Tulsa, Oklahoma. All Airbus A318 Elite completions work is gradually being moved from Hamburg to Tulsa, said Heerdt, as Lufthansa Technik seeks to free up capacity in Germany for lucrative widebody completion work, for which it has contracts and letters of commitment for work through 2018.

The Hamburg center is due to deliver two Airbus A330s and two A340s between now and 2011. Although the delivery dates haven’t been confirmed, another two contracts have been signed for 787s and three for 747-8s. Last year, Lufthansa Technik delivered one widebody airplane and five narrowbodies.