“To fully support Lufthansa and our growing IFE business in Europe, we established a working relationship with Lufthansa Teknik, a premier European services company,” remarked Fred Falk, vice president of corporate development for e.Digital. “We appreciate the opportunity to work with Lufthansa and support their portable IFE and services needs.”

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March 18, 2008 – LUFTHANSA Technik is investing Eur10 million ($15.4 million) in a dedicated cabin systems research and development facility at its Hamburg base.

Work on the building has just begun and the German VIP/corporate completion provider’s existing Innovation Engineering unit, now relabelled Cabin Innovation, is due to move in as soon as this December. It will house offices, testing laboratories, workshops and exhibition areas for the new products in development.

The facility represents a major vote of confidence by the company in the activities launched under the Innovation Engineering banner a handful of years ago. Since then the operation, headed by Australian Andrew Muirhead, has turned out a string of products that have been taken up with enthusiasm by LHT’s VIP and corporate customers. They include the NICE Ethernet-based cabin network, the AirTV moving-map and passenger information system, the MAR intelligent communications router, an AVOD inflight entertainment server and a range of high-definition-capable screens.

Lufthansa Technik is also developing both active and passive cabin noise control systems, work which will now be brought under the Cabin Innovation roof.

“The new building will represent an expansion of our competence in this field, paving the way for long-term growth of our cabin systems business,” chairman August Henningsen said at the company’s annual-report press conference in Hamburg last week. “It will also lead to a significant improvement in the networking of our cabin expertise.”

Henningsen pointed to the company’s VIP customer base as prime driver behind its cabin systems activities. “These customers have very sophisticated demands, resulting in a constant need to further develop existing systems,” he said. “We will offer derivatives of these systems to the business aviation community. We also plan to focus on cabin noise reduction in VIP/business aircraft, and how this can be extended to airliners, and on overall weight savings in the cabin.”

Lufthansa Technik’s cabin systems team currently numbers 60 people, a figure that is expected to grow to around a hundred in the new building, with staff from external suppliers adding a further hundred. The five-storey building will have a total floor area of 6,500 square metres, with 2,500 going to offices and the rest to labs, workshops and showrooms. It was designed by Renner Hainke Wirth, the firm of architects that also conceived the prize-winning “flying wing” reception building at LHT’s Hamburg base.

The company’s existing airworthiness qualification team will move into the building, where it will use a lab fully equipped for environmental, electromagnetic compatibility, vibration and crash testing.

LHT chief technology officer Bernhard Conrad is ultimately responsible for the Cabin Innovation effort. “Cabin systems began modestly and developed into a very successful core business for Lufthansa Technik,” he said last week. “This new facility will allow us to expand our position as the leading one-stop shop for products related to the cabin. The concepts for future standards for airlines, as well as business and VIP business jet customers, will emerge in this building.”

Cabin systems is part of an overall Lufthansa Technik business that centres on maintenance, repair and overhaul (MRO) services for the parent airline and third parties. Last year the company recorded total revenues of Eur3.6 billion, up 6.7 per cent on the previous year, and pre-tax earnings of Eur287 million, up 18.6 per cent. Other news to emerge in Hamburg last week related to the NICE cabin network and the company’s VIP completions activities.

NICE is a standard option on the Bombardier Challenger 300 mid-size business jet. “So far we have delivered kits for 70 aircraft,” chairman Henningsen reported.

Turning to completions, he said: “Today it is almost more difficult to find a completion centre for large private aircraft than it is to acquire an aircraft in the first place. The first Airbus A380 has been sold to a private customer, as have two A350s, over ten Boeing 787s and five 747-8s. We have signed contracts for the completion of the first VIP 747-8 and we are in preliminary talks with customers in relation to those other aircraft types.”

Henningsen said that the Hamburg completion centre was running at full capacity, working on a 747 and the Airbus A318 Elite programme, for which LHT is the sole completions provider: “Airbus has sold over 20 Elites, we will deliver the third in the next few days, the fourth aircraft is in our hangar, and contracts for a total of 11 have been signed.”

The company has just been contracted by the German Government to complete a pair of ex-Lufthansa Airbus A340-300s in VIP configuration. Press reports suggest that the total bill for acquisition of the aircraft, the refits, training and support will come to Eur700 million. Last year Germany’s Federal Office of Defence Technology and Procurement selected Lufthansa Technik to modernise the government’s medium-range fleet of VIP transports.