Australian engine overhaul provider LTQ Engineering is to cease operations in September, after joint venture partner Lufthansa Tecknik told Qantas it would no longer invest in the facility that has made a loss every year since it opened in 2004.
LHT cited a "strong decline in engine overhaul demand" for the closure of the Tullamarine International Airport-based company catered for the CFM56 engine.
"Reduced regional demand, tough international competition and more reliable new generation engines have directly impacted the viability of the business. Simply put, LTQ does not have the scale of engine maintenance work to be competitive," said LTQ Chairman and Lufthansa Technik chief executive officer, August Wilhelm Henningsen.
"Significant investment had been made in LTQ since the joint venture was formed and the shareholders had continued to support the business even though it had made consistent losses in each year of its operation. By taking the decision now while the company remains solvent, it ensures that all employees will receive their full entitlements and all obligations to creditors can be met, " Henningsen added.
LTQ Engineering's board evaluated a number of different strategies to address the continued losses, including winding down the company.
"Considering the strong decline in demand and the company's business and outlook, LTQ is not financially viable. The joint venture partners have therefore decided to wind down production and close the company."
LTQ has been in operation since 2004 - formerly under the name of Jet Turbine Services - before becoming a new joint venture between Lufthansa Technik and Qantas Airways Limited in 2008.