Deutsche Lufthansa AG (LHA) said it’s looking at closing an Irish engine-repair arm that employs 400 people as demand for its services falters.
Lufthansa Technik, the carrier’s maintenance unit, will begin talks with unions and staff immediately on the shuttering of Dublin-based Airmotive Ireland, according to a statement today. The business overhauls engines made by CFM International, a venture of General Electric Co. (GE) and Safran SA, among others.
The Irish division’s specialization in CFM56-3 and CFM56-7 series turbines, designed for the first and second generations of Boeing Co. (BA)’s 737 single-aisle plane, is proving a burden as Lufthansa streamlines around Airbus SAS A320 jets. Lufthansa Technik gets close to half of sales from the parent company.
The decision follows an “extensive review” of the unit, which saw revenue fall with no opportunities in the maintenance market to compensate for that, Lufthansa said. Set up by Aer Lingus Group Plc (AERL) in 1980, Lufthansa bought a 60 percent stake in the company in 1997, before taking full ownership 2 years later.
Lufthansa Technik is the world’s largest maintenance, repair and overhaul (MRO) provider for the aviation industry.
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