Lufthansa’s Course Taking Stock after Tragedy

The Germanwings crash cast a shadow over Lufthansa’s shareholders’ meeting, but the tragedy has forged a new sense of unity that could help drive reforms at Europe’s largest airline.
Dark times.

It was clear that this wouldn’t be a normal Lufthansa shareholders’ meeting.

The flags on the poles outside Hamburg’s Congress Center were oddly colorless, dominated by a dull gray instead of the bright yellow associated with the largest airline in Europe. Two strips of black ribbon fluttered above every flag on every pole, a stark reminder of the tragic crash of Germanwings flight 4U9525 in March.

A memorial corner was erected in the foyer with 150 white electric candles flickering in front of a black wall. “I pray for the people who had to lose their lives in this way,” a shareholder wrote in the book of condolences placed nearby.

Before the meeting began at 10 a.m. on Wednesday, supervisory board Chairman Wolfgang Mayrhuber asked for a moment of silence, saying, “No one on earth is capable of making restitution for the unspeakable suffering.”

When Lufthansa’s Chief Executive Officer Carsten Spohr stepped to the microphone, his shock and concern was visible and shared by everyone. “The thought of this tragedy still arouses disbelief, horror, and grief,” he said. “To this day, we cannot comprehend it.”

Despite the shock and grief caused by the catastrophic crash in the French Alps, that grim event could help “Hansa” solve its many internal problems. An ongoing dispute between management and pilots has already resulted in 15 strikes and cost the airline €230 million ($258 million).

Until the day of the crash, positions were entrenched and the participants stubborn, but now they are moving together. A new feeling of unity is arising in a company that at one point looked like it would be torn apart by internal divisions.

Such a dramatic event can change how you view things Ilja Schulz, President of the pilot’s union

“This morning we offered (the German pilots’ union) a comprehensive settlement on all open wage agreements,” said Mr. Spohr, a statement that would have been unthinkable before the March 24 crash. But it now suggests the first delicate hints of cultural change within Lufthansa.

Mr. Spohr, a former pilot himself, made a grand gesture by extending his hand to the pilots, who have been demanding an overall settlement. Previously, the CEO rejected their demands.

Now, management and the union can discuss issues such as eligibility for early retirement and who will fly the planes of the new low-cost airline Eurowings. What sounds mundane is, in fact, a great step forward, both emotionally and operationally.

Mr. Spohr is giving pilots a greater say. They can now negotiate a variety of issues at the same time while also bargaining for compromises in areas Mr. Spohr refused to budge on, such as a plan to use “cheap pilots” for Eurowings, a development pilots fear would undermine their wage deals.

The peace offering by Mr. Spohr isn’t the only good sign. Trade unionists also extended a hand to management that ultimately could unite Lufthansa. “Such a dramatic event can change how you view things,” said Ilja Schulz, president of the pilot’s union, a few days ago.

 

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Word from inside union headquarters in Frankfurt is that members are happy with Mr. Spohr’s offer, though naturally, the contents must be studied in detail.

Shareholders sense a new climate and welcome it. “It’s very positive,” said Marc Tüngler of the Deutsche Schutzvereinigung für Wertpapierbesitz (DSW), Germany’s oldest and largest association for private investors. The two pilot representatives on the supervisory board, Stefan Ziegler and Jan-Willem Marquardt, responded to Mr. Tüngler, “Don’t be the stumbling block, don’t lapse into the old routine.”

It’s in their own self-interest for stockholders to support a new feeling of unity at Lufthansa, whose logo is a crane in flight. They want the agreement and the urgently needed refocusing it will bring because it is their company and their dividends. Yet there is no denying a rising optimism is now present.

“The crane will rise out of the ashes like a phoenix and shine again,” said Elke Klein, a Lufthansa employee and stockholder.

 

Jens Koenen covers the airlines for Handelsblatt. To contact him: [email protected]