HAMBURG: German airline Lufthansa holds its annual shareholders’ meeting in Hamburg yesterday in the shadow of the devastating Germanwings crash that killed 150 people just over a month ago.
French investigators believe that the co-pilot of the jet belonging to Lufthansa’s low-cost subsidiary deliberately slammed it into the French Alps on March 24, killing everyone on board.
In the wake of the tragedy, Lufthansa cancelled its 60th anniversary celebrations and both the carrier and its chief executive, Carsten Spohr, have kept a low profile in recent weeks.
But Spohr, 48, is scheduled to address around 2,000 shareholders in a huge congress centre in the northern port city of Hamburg, where he will face tough questions about the company’s strategy, financial results and the performance of its shares on the stock market, as well as the state of the investigation into the crash itself.
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 hurt 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.
Investors 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 carriers from the Gulf region and budget airlines.
Costs are Lufthansa’s biggest headache as it looks to rejuvenate its aircraft fleet and the current low level of interest rates in Europe force it to set aside more financial provisions to pay for the generous pensions of its staff.
Lufthansa has even managed to lose money from the decline in oil prices – normally a boost to the sector – as a result of losses on its financial hedging instruments.
In order to address such challenges, Spohr recently said the group needed to “break out of the old modes of thinking.”
Spohr, 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.
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. — AFP