Aircraft maintenance group Lufthansa Technik Airmotive has reported a 25 per cent rise to $19.06 million (€15.11 million) in pretax profits at its Irish operation, which includes the troubled Shannon Aerospace.

Newly-filed accounts for the German group's Irish holding company show that turnover rose to $227.61 million last year from $165.85 million and operating profits rose to $20.24 million from $15.94 million. The organisation employs 1,295 staff in Ireland. The improvement in sales and profitability at the subsidiary of Deutsche Lufthansa AG was recorded against a backdrop of difficult conditions in the aircraft maintenance business .

"Over-capacity affected all companies within the group. Aircraft overhaul, in particular, suffered as a result of the trend towards lighter workscopes which resulted in lower production volumes," the directors of the group said in a report with the accounts.

After a prior-year restatement, the rise in profitability last year brought the profits retained by the business to €65.53 million at the end of 2005. The holding company acquired a 50 per cent stake in Shannon Aerospace that it did not already own at the start of 2005.

While its accounts do not break down the performance of the individual divisions in the holding company's business, they make it clear that "all companies in the group contributed positively to group profits during the year".

This includes Shannon Aerospace, which encountered severe industrial relations difficulties last summer over its failure to grant pay increases due under the Sustaining Progress agreement.

"Cost control was a main feature of the business during the year and much headway was made in increasing productivity and reducing overheads," the holding company's accounts said.

"The airline industry tends to be cyclical in nature and the directors consider this to be the principle business risk to the group's operations and its customers. The directors regard turnaround times, production volume, quality of service to customers and cost control as the key performance measures."

The Irish Times was unable to reach a company spokesperson to comment on the accounts.