Lufthansa Technik launches USM business in the U.S.
Lufthansa Technik is unveiling on April 7 a dedicated used serviceable material (USM) business for airlines and operators in response to a constrained parts market.
This service goes beyond selling its surplus parts and is targeted for North American customers.
While many OEMs and aftermarket companies offer USM, “We’re doing this because there is a strong demand in the U.S. market for USM, and we believe we can offer the market differentiation,” says Georgios Ouzounidis, LHT VP of sales for the Americas.
Lufthansa Technik is developing the USM business with a dedicated team at its component services business in Miami. That team will buy material worldwide from surplus inventory and via tearing down aircraft and engines.
While parts will be sourced globally “because we see a lot of demand in the U.S., we expect to store a lot of material at our Fort Lauderdale warehouse” to be close to customers, he says. Lufthansa Technik also will store some material at its component workshop in Tulsa, Oklahoma.
“Because we buy the material, send it to our shops, repair the material, certify the material and sell it, [customers] are buying from the source and not through a trader or middleman,” says Ouzounidis. “By doing this, we can offer them better rates and faster, more efficient service. This is the difference that we believe we can create in the market.”
He stresses that “this material will be specific for this service” and it will not be used for other services or be part of pool agreements. Until now, Lufthansa Technik sold most of its surplus material to third-party traders, but now those components can be sold straight to airlines more cost effectively.
Ouzounidis did not disclose targeted sales or revenue from this new parts business but did say Lufthansa Technik is investing a lot in the material.
In addition to launching this new business, Lufthansa Technik has announced several big investments.
It is building a 150,000-ft.2 facility in Calgary to support a $3 billion contract it won in February from WestJet to support its CFM International Leap 1B engines. Ouzounidis says 25 people are working on the facility’s plan like a startup. “We’ve been in talks with airlines since before the announcement” to analyze the market’s needs.
The question is not whether feedback has been positive, says Ouzounidis, but “how big [the facility] could be!” he says. Its plan is for 25 engine bays, but it might end up being bigger due to demand. Lufthansa Technik plans to break ground on the facility in late June and start operations there in 2027.
In addition, its component services facility in Tulsa is building a 25,000 ft.2 expansion that should be finished the end of this year. The extra space will enable it to expand its capabilities, including the addition of integrated drive generator repairs.
This is part of a $30 million investment in Tulsa and “it’s only the first step.” He expects to add about 500 jobs in Tulsa.
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