Andrew Doyle/HAMBURG
Lufthansa Technik (LHT) is launching a renewed efficiency drive as it struggles to increase profits in the face of rising personnel costs created by this year's pay deal.
The new collective bargaining agreement will saddle the German aircraft maintenance company with "a burden of over DM84 million [$45 million]" this year, says LHT executive board member Dr Gerald Gallus.
"Since we can scarcely keep upping our prices, we shall have to make special efforts," says Gallus.
LHT, a Lufthansa Group maintenance subsidiary, nevertheless is looking ahead with "guarded optimism" after unveiling 1998 pre-tax earnings of DM112.1 million ($60 million) - a 19% improvement on the previous year. Total sales rose 6% to DM3.2 billion.
Figures for the first quarter of this year, however, have "fallen short of our goals", says Gallus.
LHT's strategy is based on achieving high productivity levels and relatively short aircraft turnaround times, rather than competing in the third party market on price alone. LHT chairman Wolfgang Mayrhuber says margins remain under pressure. "We have no concerns with regard to volume, but we are running into problems on the price side," he says.
LHT continues to search for joint venture and acquisition opportunities worldwide, and is in negotiations to form an overhaul venture with Philippine Airlines.
Source: Flight International
