Corporate completion work could be hit sharply should a global credit crunch materialise as turmoil in the US sub-prime mortgage market threatens to spread to the wider economy, a Lufthansa Technik chief is warning.
Speaking at the presentation of the company's annual results, chairman August Wilhelm Henningsen said the corporate jet clientele of aircraft maintenance and repair organisations was generally more sensitive to economic downturn.
"We have noticed a trend where corporate customers are affected much more quickly than other customers. We felt the effects of Hurricane Katrina within days with modification work cancelled and commitments taken out as people refrained from spending as much cash as before."
"It was not so much of a problem because most people came back half a year later but yes, we would expect that same thing to happen again," he said, adding that the MRO business is a late-stage indicator of economic troubles. "We only see things when aircraft are grounded. Aircraft flying half empty or even completely empty still need maintaining. We do, however, have to remain flexible to respond to a lower demand level," he said.
He reported, however, that business and private aircraft MRO services had developed positively in 2007.
"Today it is almost more difficult to find a completion centre for large private aircraft than to acquire an airplane," he said, noting that the first A380 has been sold to a private customer, along with two A350s, more than 10 787s and five 747-8s.
"Our completion centre here in Hamburg has signed two pre-contracts for the completion of the first 747-8 VIP. And we are in preliminary talks with customers who, from 2010, will want to custom-equip one of those aforementioned large airplanes - in Hamburg."
"Currently our completion centre is running at full capacity, working on a 747 and especially on the A318 Elite programme. Airbus has sold over 20 A318 Elites and we will be delivering the third such A318 in the days ahead while the fourth is waiting in our hangar. Contracts for a total of 11 completions have now been signed," said Henningsen.
Source: Flight International
