A recovery in air traffic is giving engine manufacturer MTU Aero Engines cause for optimism. The industry, unlike many others, is gaining momentum, the company’s new CEO, Johannes Bussmann, said in a recent conference call with journalists. The former head of Lufthansa Technik AG has led MTU since early September. On 23 October he presented the Munich-based company’s quarterly results for the first time.

The figures turned out better than some analysts had expected. However, industry observers at UBS noted that, following strong quarterly results from competitors RTX and GE, such an outcome had been anticipated.

In the third quarter, revenue increased by just over 12% to 2.13 billion euros, while adjusted earnings before interest and taxes (Ebit) rose to 339 million euros (previous year: 273 million) and the Ebit margin improved to 15.8% (previous year: 14.7%). The company’s two business segments, however, moved in opposite directions. The adjusted Ebit margin of the OEM division rose to 34.8% (25.2%). Katja Garcia Vila, who has been CFO since July, attributed this mainly to a favourable product mix in the original equipment business and the growth of the spare parts segment.

In contrast, the margin in commercial aircraft maintenance fell to 7.6% (9.2%). Garcia Vila explained that the share of GTF engines in maintenance revenue had risen to 48%, which, as planned, comes with a lower margin. These geared turbofan engines were recalled by manufacturer Pratt & Whitney due to defective powdered metal. MTU holds an 18% stake in the GTF programme.

Nevertheless, the management board is now slightly more optimistic for the year. Bussmann said that 2025 should be an outstanding year for MTU. The company had previously forecast an adjusted Ebit increase of 21–25%, but now expects to reach the upper end of that range. The forecast for free cash flow was raised from 300–350 million to 350–400 million euros. However, due to the weak dollar, the final figure is expected to be at the lower end of the new range, the CFO added. UBS analysts, meanwhile, described the revised forecast as conservative.

Garcia Vila described the weak dollar as a challenge, adding that MTU continues to adhere to its proven currency-hedging strategy. The company has managed to limit the impact of US trade policy. „We now expect a low double-digit million effect,“ said the CFO, noting that without countermeasures the negative impact would have reached a mid- to high double-digit amount. One such measure, she explained, is that parts produced in Poland are now sent directly to MTU’s Munich plant for further processing rather than via the United States.

MTU – like the entire aerospace sector – is benefiting from the fact that aviation products have been excluded from the increase in US import tariffs. „Even though not everything has been formally signed yet,“ Garcia Vila noted. In the summer, the United States and the European Union agreed that aircraft, parts, and components from the EU would be exempt from the general import tariff of 15%.