Globalization for Growth in the Aviation Maintenance Repair and Overhaul Industry

Abstract

The globalization of aviation is one of the most impressive developments in the economic environment that we are living in. Global mobility of people and goods with almost no restrictions as to time or distance enables many companies to become global players in their industries. Most of these industries achieve growth through globalization. This growth drives the rapid development of the aviation industry, as more people fly and more goods are transported. This study considers how Lufthansa Technik has developed in the light of globalization and which mechanisms have had an impact on the company’s strategy within the Maintenance Repair and Overhaul (MRO) industry, which includes all the services relating to the technical operation of the aircraft as a system. To identify the relevant effects and developments, we have to consider a rather long period of time, as the key drivers for developments in aviation, are the long technological development cycles in aircraft design and global economic trends. This is the reason that we start the journey some years back in time. Lufthansa’s MRO activities in Hamburg started at the beginning of 1953 with the order of four Convair Metropolitan short- to medium-range aircraft and four Lockheed Super Constellation long-range aircraft. These airplanes were the nucleus of the new Lufthansa airline which commenced operation April 1st 1955. Lufthansa’s technical division began accumulating in-depth knowledge of aircraft maintenance from that point. The first engine monitoring diagnostic methods were even developed at that time. Professor Gerhard Höltje, the member of the board of Lufthansa responsible for the technical division, specified the requirements for the technical division of the new airline. The investment in maintenance hangars and shops based on Höltje’s vision laid the foundation for the further development of this division. By the end of 1955, the Lufthansa technical base in Hamburg had 651 employees, and only 5 years later that number had grown in parallel to the rapid growth of the airline to 2,460 engineers, technicians, and support staff.