With a tentative recovery underway for European airlines, Lufthansa Technik has registered a vast improvement in quarterly performance.
The world’s largest MRO provider saw revenue rise to just over €1 billion ($1.2 billion) for the three months to Sep. 30, versus €693 million in the prior-year period, as its parent airline group recorded its first quarterly operating profit since the start of the pandemic.
Lufthansa Group airlines accounted for almost a quarter of the Lufthansa Technik’s third-quarter sales.
Like the overall business, Lufthansa Technik returned an operating profit in the quarter, recording earnings before interest and tax of €22 million, versus negative €116 million in the prior-year period.
And this momentum should be sustained through the rest of the year, as the parent expects to avoid cash burn even during the traditionally difficult final quarter.
“The coronavirus crisis continued to impact the performance of the MRO segment; in the course of the reporting year, however, there has been a marked improvement in the situation driven by the increasing recovery in passenger traffic; revenue and earnings development also improved accordingly, particularly in the second and third quarters of the year,” stated Lufthansa.
However, operations are still some way from normal: In 2022 Lufthansa expects its total airline capacity to be around 70% of 2019 levels.
The knock-on impact on its MRO unit has been significant, forcing Lufthansa Technik to close six line maintenance stations in Germany and a base maintenance facility in Shannon, Ireland, as part of its ongoing restructuring efforts.
As a measure of how far from normal trading the industry has sunk, it’s worth noting that Lufthansa Technik’s revenue for the first nine months of the year is still appreciably below that of the same period in 2020 despite much better second and third quarters this year – good as these were, they were still not enough to compensate for three months of pre-pandemic business at the start of 2020.
