Lufthansa says Germanwings crash scarred it forever

[HAMBURG] The Germanwings crash permanently scarred the airline's parent company 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 - dressed in a black suit and tie - gravely told some 2,000 shareholders in the northern German port city of Hamburg.

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

"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.

A book of condolences lay open for shareholders to sign in the huge congress centre where the meeting was 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 would "continue to gradually expand our leading position in the area of flight safety, by continuing to develop our safety structures".

Lufthansa's image in Germany has not been significantly impacted by the crash, which investigators blamed on co-pilot Andreas Lubitz, who had been treated for suicidal tendencies.

Public debate has focused more on the possible relaxing of medical confidentiality rules and requiring at least two people to be in an airplane's cockpit at all times.

Despite the shock and sadness that the crash caused in Germany and beyond, Lufthansa shareholders had other concerns on their minds, such as how management plans to tackle cut-throat competition in the sector, not only from the group's European rivals, but also from Gulf carriers and budget airlines.

"Lufthansa is caught in a cost trap and a strategy trap," said Union Investment analyst Ingo Speich.

One speaker, Bernhard Loewenstein, said: "I stand here before you as a sad shareholder, but above all as an annoyed shareholder." "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 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.

Meanwhile, low interest rates in Europe are eating into returns on the investments used to pay the generous pensions of its staff, forcing it to increase its financial provisions.

Mr Spohr, 48, a pilot by training, wants to position Lufthansa in the premier league of transatlantic carriers 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.

It was the resolution of that conflict, rather than the devastating crash, which was weighing on shareholders' minds, 78-year-old shareholder Jens Kleinert told AFP.

Mr Spohr conceded that the airline faced 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 root causes of the tensions remain.

On Wednesday, Lufthansa proposed taking the dispute to an external mediator, a move welcomed by the pilots' union Cockpit.

"If all contested and unresolved issues ... are included, mediation could help settle the dispute," said the union's spokesman, Markus Wahl.

"We will discuss Lufthansa's proposal and take a step towards management," Mr Wahl added.

AFP