Lufthansa's Irish holdings post 118% rise in profits

LUFTHANSA'S IRISH operations have fully recovered from an industrial dispute at Shannon Aerospace to record a 118 per cent increase in profits before tax last year.

According to the most recent returns for Lufthansa Technik Airmotive Ireland Holdings Ltd, profits more than doubled from $11 million in 2006 to $24 million (€16.35 million) last year. The company's turnover increased to $335 million (€228.25 million) from $242 million in 2006, an increase of 38 per cent.

In a statement accompanying the accounts, the company said the airline industry had experienced a buoyant year in 2007, which saw profits in most of the group's segments increase.

Industrial relation problems, which marred the results of subsidiary Shannon Aerospace Ltd in 2006, were resolved in the second quarter of 2007, the company said, and it operated profitably for the remainder of the year.

Shannon Aerospace was involved in a protracted dispute with its workforce over a number of issues including its ability to pay wage increases under the national agreements.

"The group [ Lufthansa Technik Airmotive Ireland] continued to experience strong competitive cost conditions in 2007. Notwithstanding this, there were significant contracts won in both the aircraft and engine-related business segments in 2007."

The company noted that the aircraft industry tended to be cyclical in nature. No dividend was proposed or paid by the directors in the current year.

"The emphasis of the group going forward is to keep the company focused on the changing requirements of an increasingly competitive market and of its customers," the company said in the statement.

The group's previous accounts show that the industrial dispute cost the group $9 million in 2006.

The latest accounts show that the company's cost of sales increased from $201 million to $272 million. However, operating profit nearly trebled to $28 million from $10 million.

Lufthansa Technik Airmotive Ireland has accumulated profits of $116 million at the end of 2007, up from $85 million a year earlier.

The accounts also confirm that the Irish Lufthansa group of companies are a major employer, with the accounts showing that the companies employ 1,245 people, down slightly on the 1,258 it employed in 2006.

The accounts show that 921 are employed in production, 308 in administration and 16 in sales.

The group's employee costs for 2007 were $88 million, up $10 million on 2006.