November 18, 2013
Lufthansa Technik (LHT) will move the jet engine overhaul operations of its Irish subsidiary to other locations, most likely to its engine shop in Hamburg, if it decides to close Lufthansa Technik Airmotive Ireland (LTAI).
The MRO provider says the anticipated closure follows an extensive review of LTAI’s operations “in the context of declining revenues and shrinking international market opportunities” for its business. LTAI specializes in the repair and overhaul of CFM56-3 and CFM56-7 engines, International Aero Engine V2500-A5 powerplants and Pratt & Whitney JT9D engine types.
The final outcome—and whether the LTAI facility will close or downsize—will depend on discussions with employee representatives and “all possible options are being considered. They are truly open negotiations,” a spokesman insists.
LHT today started consultations with its three trade unions (TEEU, SIPTU and Unite) and existing employee representatives. The legally required consultation will last 30 days.
Revenue and profits of LTAI have steadily declined in the past years, but a dispute with staff over funding a pension deficit also is playing a role. In August, union members rejected a proposal from the company to inject €12 million ($16 million) into the pension scheme; staff would have faced some increase in contributions and a reduction in benefits.
The pension deficit issue is part of the negotiations, the spokesman says.
Ireland’s Minister for Jobs, Enterprise and Innovation Richard Bruton has asked IDA Ireland, the country’s investment and development agency, to work with management to find a solution with LTAI and to identify whatever alternatives that can be developed to safeguard jobs.
Lufthansa Technik Airmotive Ireland has 411 employees.
Airmotive Ireland was founded by Aer Lingus in 1980. Lufthansa Technik acquired a 60% shareholding in 1997, and took full ownership in 1999.