Lufthansa scarred forever


HAMBURG, 30 April 2015: The Germanwings crash has left permanent scars on parent airline Lufthansa, its chief executive told shareholders at their annual meeting Wednesday, which started with a minute’s silence to honour the dead.

“This tragedy has changed us and the scars that it has left on our company will remain forever,” CEO Carsten Spohr told some 2,000 shareholders in the northern German port city of Hamburg.

A jet from Germanwings, the low-cost subsidiary of Lufthansa, crashed in the French Alps 24 March — apparently in a deliberate act by the co-pilot — killing all 150 people on board.

“The entire Lufthansa family is in mourning,” said supervisory board chief Wolfgang Mayrhuber, who formally opened the annual general meeting with the minute’s silence.

inside no 10.1 A book of condolences lay open for shareholders to sign in the huge congress centre where the meeting was being held.

Spohr said Lufthansa would “stand by… and support” the families and friends of the people who died.

“We consider this not only our obligation, but also a deep need,” he said.

He vowed that Lufthansa “will continue to gradually expand our leading position in the area of flight safety, by continuing to develop our safety structures”.

The media and public opinion in Germany have been generally lenient towards Lufthansa since it emerged that the disaster was likely a deliberate act by co-pilot Andreas Lubitz, who had been diagnosed as suicidal in the past.

Doctors had recently found no sign that he intended to harm himself or others, but he was receiving treatment from neurologists and psychiatrists who had signed him off sick from work a number of times, including on the day of the crash.

Police found torn-up sick notes during a search of his apartment after the crash.

Instead, public debate has focused more on the possible softening of medical confidentiality rules and requiring at least two people to be in an airplane’s cockpit at all times.

Despite the deep shock and sadness that the crash caused in Germany, Lufthansa shareholders have other things on their minds, such as the airline’s poor financial performance and management’s decision to waive dividend payments.

inside no 10Investors are also concerned about how management plans to tackle cut-throat competition in the sector, not only from the German group’s European rivals, but also from Gulf region carriers and budget airlines.

Lufthansa has even managed to lose money despite the decline in oil prices — normally a boost to the sector — as a result of losses on its financial hedging instruments.

“We all know and feel that this isn’t a normal AGM,” said Marc Tuenngler of the DSW federation of small shareholders, a regular and normally combative speaker at the various AGMs of blue-chip companies up and down the country.

“I’m prepared to be less aggressive, today,” he said, but “Lufthansa’s problems are still there”.

Costs are Lufthansa’s biggest headache as it looks to rejuvenate its aircraft fleet, and as low interest rates in Europe force it to set aside more financial provisions to pay for the generous pensions of its staff.

Spohr, 48, a pilot by training, wants to position Lufthansa in the premier league on transatlantic routes and farm out most of the domestic and European routes to the group’s low-cost subsidiaries.

But such plans are riling Lufthansa’s pilots, who have staged no less than 12 industrial walkouts in the past year, some lasting for several days.

And it was the resolution of that conflict, rather than the devastating crash, which was weighing on shareholders’ minds, one of them, 78-year-old Jens Kleinert, told AFP.

“It’s known why (the crash) happened,” he said.

But, regarding the strike action, he said: “The pilots are the problem.”

Spohr conceded that the airline faces ongoing challenges.

“Even if we all feel the need to step back and take a break after this terrible tragedy, an aviation group or airline cannot stop –- not for weeks, not for days and not even for hours. We must and we will continue,” he said.

The shock of the Germanwings crash may have led to a temporary truce between unions and management, with Spohr lauding the group’s pilots as the best in the world. But the ceasefire cannot last forever while the roots of the problem remain unresolved.

On Wednesday, Lufthansa proposed to the pilots’ union Cockpit to take the dispute to an external mediator.

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