MTU Aero Engines is expecting a strong recovery in commercial maintenance in 2021.
At its virtual Capital Market Day, the company said this part of its business would show “the clearest recovery from the effects of the coronavirus crisis” next year, with revenue growth “in the twenty per cent range”.
As a result, MTU said it would stick to its expansion plans, including establishing a component repair site in Serbia and expanding its 50/50 MTU Maintenance Zhuhai joint venture with China Southern Air Holding Company.
MTU noted that its spare parts business would also “pick up”, posting “slightly higher” revenue. But revenue from commercial engine manufacturing is expected to remain flat.
“All market analyses indicate that aviation will remain a growth business in the long term,” said MTU Aero Engines’ CEO Reiner Winkler.
“We see the coming years as a restart phase in which we will use our technological leadership, innovative strength and flexibility to extend our good starting position, so that we can derive above-average benefit from the growth of the sector from 2024.”
With a focus on organic growth, Winkler said MTU would be able to capitalise on its “future-oriented product portfolio, diversified customer base and solid financial structure”.
Chief program officer Michael Schreyögg said key drivers would be the company’s “strong position in engines for narrowbody aircraft and our large customer base in the cargo sector”.
“Use of modern aircraft like the A320neo is strong, so we will see a significant rise in maintenance of PW1100G-JM engines in the future,” said Schreyögg.
In the commercial spare parts business, MTU predicts the main revenue drivers in 2021 will be the V2500 for the A320, the CF6, which is used in many Airbus and Boeing models, and the PW2000 for the 757.
Commenting on engine manufacturing, Schreyögg said: “Lower output of aircraft is reflected in engine production. There are signs that production will be ramped up again in the mid-term, especially production of the A320neo. On the engines side, we are optimally prepared for that.”
MTU added that it was focusing on the entire value chain, “from product design and supplier management, through procurement strategy, quality management and cost management to automation and digitalisation”.
Chief operating officer Lars Wagner noted: “Our declared aim is to maximise production flexibility while maintaining the highest quality standards and, at the same time, expanding our technological and cost leadership.”
The company is working on future technologies, he said. “We are paying special attention to issues such as emission-free flying, especially topics like hydrogen and flying fuel cells.”
Discussing the company’s financials, chief financial officer Peter Kameritsch said safeguarding liquidity was the “top priority”. He commented: “We are acting with foresight to steer MTU safely through the crisis and restart phases and, at the same time, to ensure we have the necessary financial headroom for organic growth and investment in new programmes.”
Kameritsch said the company had increased its liquidity reserves “considerably” in 2020 and introduced a restructuring programme. The resulting capacity adjustment of ten to 15 per cent should be completed by the end of 2021, he noted.