- World market leader slips deep into the red
- Sales successes and new customers secured nonetheless
- RISE program to lead the way out of the Crisis

The crisis in the aviation industry brought on by the coronavirus
pandemic has hit Lufthansa Technik AG hard. In fiscal year 2020,
revenue* plummeted by 43% year-on-year to EUR3,747 million (prior
year: EUR6,572 million). Adjusted EBIT dropped well into the red to
EUR-383 million (prior year: EUR463 million).

In the second quarter of 2020, the pandemic led to a temporary
suspension of the majority of air traffic worldwide, resulting in
extensive downtime and decommissioning of commercial aircraft, as
well as postponements of maintenance events. As a consequence, demand
for maintenance, repair and overhaul (MRO) services for aircraft,
engines and components suffered a massive slump. Lufthansa Technik,
the MRO world market leader, felt the impact of this development in
the capacity utilization of its workshops. Certain product divisions,
such as Engines and Component Services, saw their capacity
utilization temporarily drop by well over half.

As a result, the company has had to reduce its workforce: Including
external staff, the number of employees worldwide has already
declined by more than 3,000 in the wake of the crisis - a reduction
of 12.5% compared with 2019. This also included around 1,900
temporary workers around the world. In terms of in-house staff, the
number fell by 5% to 22,745 at the end of 2020 (year-end 2019:
23,855). Numerous investments also had to be stopped or postponed. At
EUR152 million, expenses for investments were thus significantly
lower than in the previous year (EUR313 million).

Dr. Johannes Bussmann: "Ending the toughest year in the company's
history with confidence"

"The year 2020 was the toughest in our company's history to date. And
yet we can end it with some confidence," said CEO Dr. Johannes
Bussmann. "Our broad product portfolio and global network have saved
us from an even worse fate. We have managed to retain almost all of
our customers. Our partnerships, some of which go back many years,
have proven to be stable, enabling us to win numerous new orders
despite the situation. Under the circumstances, we made the best of
this year."

In fiscal year 2020, Lufthansa Technik had more than 4,500 aircraft
under exclusive contracts. Over the course of the year, the company
won 16 new customers and concluded more than 500 new contracts with a
total volume of EUR2.3 billion for 2021 and the following years.
Among other things, Lufthansa Technik's broad international
positioning paid off here: When demand came to an almost complete
standstill in some regional markets, business in other regions was
already beginning to stabilize. Although the broad product portfolio
was not enough to offset the considerable economic consequences of
the pandemic, it did mitigate them considerably. The VIP & Special
Mission Aircraft Services division, for example, enjoyed very good
capacity utilization throughout the year. Notable projects include
the cabin completion of the first Airbus A350 for the Special Air
Mission Wing of the German Ministry of Defense as well as the support
provided for SOFIA, the flying telescope operated by NASA and the
German Aerospace Center (DLR) - both projects that underscored
Lufthansa Technik's leading position in this field.

Innovative crisis products and expansion of digital Services

Many of the contracts signed in 2020 were for specially developed
crisis products, showing that Lufthansa Technik was able to respond
quickly and flexibly to changes in customer demand. Examples include
solutions to temporarily convert passenger aircraft into auxiliary
freighters as well as parking and storage services for decommissioned
aircraft, engines or components. The global network for smart,
on-demand engine repairs (Mobile Engine Services) was further
expanded, including the addition of a new location in Dublin.

Moreover, the coronavirus pandemic led to increased demand for
digital MRO services. For example, in December alone, more than 600
United Airlines aircraft were signed up for Lufthansa Technik's
AVIATAR, which is now being used to collect additional data and
develop further predictive maintenance solutions.

"The order from United Airlines was a real milestone for our AVIATAR
platform. Winning so many aircraft all at once is a great success in
times like these," added Dr. Bussmann. "And I'm optimistic that more
will follow, because many airlines used the past year to take a close
look at the digital future of technical fleet management. Our leading
position in this market is thus another reason for me to look to the
future with confidence."

RISE program to lead the way out of the crisis

In addition to the measures taken in spring 2020 to safeguard
liquidity - such as short-time work, hiring freezes and reductions in
material costs - Lufthansa Technik launched the RISE program in the
second half of 2020. Its goal is to secure the company's leading
position in the MRO market. Lufthansa Technik aims to use RISE first
and foremost to improve its competitiveness, for example by
introducing a leaner and more efficient corporate structure adapted
to the new challenges arising from the coronavirus crisis and able to
accommodate the permanent changes in the MRO market. Instead of the
previous eight product divisions, there will be only five in the
future: Aircraft Component Services, Aircraft Maintenance Services,
Digital Fleet Services, Engine Services and Original Equipment &
Special Aircraft Services.

"Until the coronavirus crisis is under medical control, I can't make
a reliable assessment of when the aviation and MRO industries will
recover their strength," Dr. Bussmann said. "I also know that in
taking the necessary measures, we're asking a lot of our employees in
these difficult times. But I'm firmly convinced that these measures
will help us find the strength we need to emerge from the crisis
successfully in the end."

*All the figures in this press release relate to Lufthansa Technik AG
and its fully consolidated companies including Lufthansa Industry
Solutions. Previous year's profit and loss as well as employees
figures have been adjusted due to a Line Maintenance transfer from
Lufthansa Technik AG to Deutsche Lufthansa AG. The full Annual Report
is available on the Internet at the following link:
http://www.lufthansa-technik.com/financials