GE, Lufthansa Technik Look to Poland for Engine Repair JV
GE Aviation and Lufthansa Technik's (LHT) confirmation that they have selected Poland as the location for their new engine repair services joint venture, with plans to invest around €250 million ($267 million) in the project, is a show of faith in the burgeoning Eastern Europe aviation market.
First announced as a memorandum of understanding at the 2015 Paris Air Show, the XEOS JV will focus on maintenance services for two specific engine types: the in-service GEnx-2B used on Boeing 747-8 aircraft from 2018, and the next-generation GE9X variant for the Boeing 777X, with capabilities available from 2021.
When the XEOS facility becomes operational in September 2018, the 350,000m2 center in the Legnica Special Economic Zone, Sroda Slaska is expected to bring 500 new jobs to Poland once operating at full capacity. The move will also be pleasing to the Polish government, which has been actively trying to bring more technology-driven projects with skilled specialist roles to the country since its election last year.
From the perspective of GE and LHT, the decision to opt for Poland is one that makes strategic sense. The country is nicely positioned in between Western Europe (including LHT’s Germany headquarters) and Russia, serving almost as a gateway to potential operators of both the engine types for which there is a growing market. Currently, nearly 500 GEnx-2Bs are in service with 18 operators, while the forthcoming GE9X has 700 customer orders worldwide.
Like many other countries in Eastern Europe, Poland’s existing aviation infrastructure and population brings with it good access to skilled maintenance professionals.
As is often par the course for new facilities, a link-up with a local educational body to source skills is already in the works - the Wroclaw Institute of Technology is among some of the local technical schools the JV will cooperate with to train new technical specialists.
Growth rates in the region are predicted to be strong from next year onwards, outstripping the likes of its Western Europe neighbors. Aviation Week’s Commercial Aviation Fleet & MRO Forecast predicts a compound annual growth rate (CAGR) of 2.4 per cent from 2017 through to 2026.
One of the prevailing aviation trends of recent times has been to focus all eyes on the east – think the Middle East and Asia-Pacific. However, the growth of Eastern Europe, which is also seeing its regional MROs looking further afield along with overseas firms investing in the area – will also prove interesting.