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January 2017

LHT drops airframe work in Hamburg bookmark

Lufthansa Technik is to close its Hamburg overhaul operations for commercial aircraft in the course of 2017 after discussions with the wage accord partner, ver.di, ended without agreement.


Despite intensive negotiations regarding the essential accord cost reductions, the negotiating partners were unable to find a solution that would make a commercially viable continuation of aircraft overhaul in Hamburg possible. Aircraft overhaul in Hamburg has been under significant cost pressure for some time. Because of the wide-ranging consequences of this decision, the Executive Board repeatedly extended the framework for discussions and negotiations in order to make a solution possible.


Some 300 of the approximately 400 jobs at the Hamburg site in the hangars and associated workshops are affected by the closure. Employees will be assigned to other business units or be offered alternatives, for example, semi-retirement. All affected employees will be offered suitable work with Lufthansa Technik. There will be no forced redundancies whatsoever in this context.


In the future, Lufthansa Technik will offer aircraft overhaul at its international locations in Budapest, Malta, Manila, Puerto Rico, Shannon and Sofia. Around 7,500 people are currently employed with Lufthansa Technik at its Hamburg site.  

PEMCO acquired by ATSG/AMES bookmark

Airborne Maintenance and Engineering Services (AMES), a subsidiary of Air Transport Services Group, has acquired PEMCO World Air Services. The company did not assume any PEMCO debt in connection with the acquisition.


The acquisition will allow for a number of strategic benefits through combining operational strengths, expanded capabilities and cost savings derived from shared services between the companies. The services of the combined AMES/PEMCO businesses will be marketed worldwide to customers as part of a comprehensive set of ATSG solutions, as well as to ATSG affiliates.


Services will be offered from multiple locations, including Wilmington and Tampa for heavy maintenance and modifications, and Tampa, Central America and Asia for passenger-to-freighter conversions. Additional service offerings of aircraft-on-ground field teams, line and turnaround maintenance, component repair and overhaul, engineering repair and design, and extensive manufacturing and kitting capabilities, will be extended from various locations. 


ATSG President and CEO Joe Hete said, “Based on PEMCO’s existing domestic and international scale, this acquisition will expand access to maintenance service for customers of ATSG’s expanding fleet of Boeing 767 cargo aircraft. It is consistent with our goal to diversify ATSG’s revenue and earnings, for an investment in the same price range as our planned and completed stakes in cargo airlines in China and Europe. The combination of PEMCO’s conversion and MRO sales of both Airbus and Boeing products with AMES’ existing offerings will create a sustained, growth-oriented aircraft maintenance product and services portfolio.” 


Hete added that based on ATSG’s current estimates and outlook, the PEMCO acquisition is expected to be accretive to ATSG’s earnings, starting in 2017.


In March 2016, ATSG announced agreements with Amazon Fulfillment Services to operate an air cargo network dedicated to serving Amazon customers in the United States. The commercial agreements included the leasing of 20 Boeing 767 freighter aircraft to Amazon Fulfillment Services by ATSG’s Cargo Aircraft Management (CAM); the operation of the aircraft by ATSG’s airlines, ABX Air and Air Transport International; and gateway and logistics services provided by ATSG’s LGSTX Services. The duration of the 20 leases is five to seven years with the agreement covering operation of the aircraft for five years. In conjunction with the commercial agreements, ATSG also has agreed to grant Amazon warrants to acquire over a five-year period up to 19.9% percent of ATSG’s common shares.

LHT and GE set up XEOS in Poland bookmark

Lufthansa Technik and GE Aviation selected the Legnica Special Economic Zonee in Sroda Slaska, Poland, as the site for its XEOS MRO joint venture for GEnx-2B and GE9X engines. The joint venture will invest about $267 million in the new 32,500m² facility. Ground breaking will begin in Spring 2017 and the facility will open in September 2018 with the capability to repair GEnx-2B engines that power the Boeing 747-8 aircraft. MRO capabilities for the GE9X, which powers the Boeing 777X aircraft, will be available in 2021. Employment will begin at about 220 and grow to about 500 employees at full capacity. 


The Legnica Special Economic Zone (LSEZ) was selected due to its development potential, economic competitiveness and government support. Moreover, the availability of a highly-skilled workforce was also a key factor in the decision. An intensive cooperation is planned with the Wroc?aw Institute of Technology and the local technical schools to help train current and future generations of employees for the joint venture.


The centre will mainly service GEnx-2B engines. Close to 500 GEnx-2B engines are in service with 18 operators around the world, and the fleet has accumulated 5 million flight hours. Almost 700 GE9X engines have been ordered by customers around the world. 


The two parties are expected to finalise certain agreements regarding the joint venture during the first quarter of 2017.

Embraer to set up new customer support business bookmark

Embraer has announced the creation of a business unit focused on services and customer support, which will be led by Johann Bordais, who is currently serving as the Director of Services and Support for Embraer Commercial Aviation. The new business will start operating in the first half of 2017 and will be responsible for developing solutions in support of current and new products and services, as well as for managing the associated processes and resources. The daily customer relationship structure (sales and technical support) will remain under the responsibility of each business unit; Commercial and Business Aviation as well as Defense & Security.


There are currently around 2,000 Embraer aircraft in commercial operation alone. In addition, there are over 1,000 Embraer executive jets, as well as military aircraft. Over the next 20 years, an estimated 6,400 new aircraft will be put into service, in the category of commercial jets up to 130 seats. In business aviation, forecasts indicate that there will be more than 8,000 new jets placed into service over the next decade, not counting the commercialisation of the pre-owned fleet.

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