German interiors firm expands capacity abroad

 - October 5, 2008, 3:07 PM

Lufthansa Technik, one of the world’s largest centers for interior completion and refurbishment of narrow- and widebody aircraft is expanding in a move designed to increase its capacity in the face of growing market demand.

At a press conference here yesterday, chairman August-Wilhelm Henningsen went into some detail regarding Lufthansa Technik’s recent growth in the U.S. and Switzerland.

Bizjet in Tulsa, Okla., a subsidiary of Lufthansa Technik, is now expanding its capacity to include narrowbody executive/ VIP interior work. A new facility there will begin outfitting Airbus A318 Elites with individually customized cabins beginning next year, under the certification authorities granted to the parent company.

The decision was a major step in relieving the pressure on the Hamburg facility by taking on a growing share of the responsibility for narrowbody cabin finish work, thus allowing the parent company in Hamburg to focus on the equally fast-growing demand for the highly customized widebody market.

According to Henningsen, the shift will also involve the transfer of some engineering and technical personnel from Hamburg to Tulsa, but “a limited number for a limited time.” Eventually, Bizjet is expected to take on full responsibility for the company’s narrowbody cabin completion and refurbishment work.

Moving Into the Competition’s Backyard
At the same time, with the recent launch of Lufthansa Technik Switzerland in Basel, the company is “significantly expanding its capacity to provide technical support for VIP and business aircraft in the European market.”

Basel is also the home of Jet Aviation, Lufthansa Technik’s major competitor in the maintenance, modifications, completions and refurbishment business.

As of October 1, Lufthansa Technik has taken full control of the former Swiss Air Lines facility, employing nearly 500 technicians and engineers at Basel-Mulhouse Airport. The facility is expected to maintain and support narrow- and widebody executive/VIP aircraft, and at the same time the regional aircraft fleet of Swiss Air Lines. With this work, Lufthansa Technik Switzerland expects to maintain the current workforce intact, despite a decline in demand for maintenance work on Swiss Air Lines’ Avro 100 fleet. In fact, the facility plans to invest in further modernization of the facilities and create as many as 70 additional jobs over the next few years.
As with the shift in narrowbody completion work to Bizjet in Tulsa, the acquisition of the facilities in Basel will take pressure off the parent company in Hamburg as demand grows for base maintenance for larger executive/VIP aircraft.

Expanding Capabilities
Meanwhile at home, Lufthansa Technik is being “significantly expanded to cope with the extremely high demand for customized interior completion of large and very large VIP and government aircraft.”

Beginning in 2010, the Hamburg facility will have the capacity to simultaneously outfit three widebody aircraft. “The demand for customized interior completions of Boeing and Airbus widebody aircraft has risen dramatically,” said Henningsen. He noted the current workload as evidence:
• Three A318s have just been delivered, four more currently are in the completion process and contracts have been signed for another four aircraft.
• The German government has contracted for interior completion of two Airbus ACJs to be delivered in 2009 and 2010, and ACJ has been contracted by a private customer for delivery in 2011.
• There are letters of intent for four Boeing Business Jets to be delivered between 2010 and 2012.
• As for widebodies, in addition to contracts for outfitting of two Airbus A330s and two Airbus A340s by 2011, letters of intent have been signed for three Boeing 747-8s and three Boeing 787-8s to be completed by 2018.
• Two A340-300s have been contracted by the German government for delivery in the summers of 2010 and 2011.

Henningsen said despite the financial difficulties of the U.S., “The North American market will not disappear.” Meanwhile, he noted the increase in demand for narrow- and widebody executive/VIP aircraft in China, Eastern Europe, Russia and India, as well as continued demand in the Middle East.

Meanwhile, demand continues for interior completion and refurbishment of narrow- and widebody aircraft, and Lufthansa Technik has slots reserved as far out as 2018.