At the annual general meeting of the MDAX-listed Lufthansa Group in Frankfurt, CEO Carsten Spohr vehemently defended his company's austerity measures against criticism from unions. Spohr described the establishment of new airlines outside the core Lufthansa brand as a "strategic necessity" in order to be able to serve additional destinations with a more favorable cost structure.
Spohr explained that companies like Discover Airlines and Edelweiss have made it possible to enter new markets thanks to their lower cost bases. He also highlighted the role of Eurowings, which, with its fleet of approximately 100 aircraft, operates as a successful provider of tourist flights outside of the Frankfurt and Munich hubs. In the future, the new company, City Airlines, will also offer feeder flights to the two major hubs. This strategy aims to strengthen the competitiveness of the entire group by creating appropriate cost structures for different market segments.
The pilot unions Vereinigung Cockpit (VC) and UFO, representing cabin crew, have been sharply criticizing this strategy of outsourcing flight operations, some of which are not subject to the core Lufthansa collective bargaining agreement, for years. Shortly before the annual general meeting, UFO chairman Joachim Vázquez Bürger described the resulting competitive situation as "internal corporate annihilation."
The Cockpit Association called on the company to begin collective bargaining negotiations on retirement and transitional benefits for the approximately 4.800 pilots of the core Lufthansa brand this May. If these negotiations fail, renewed strikes at the already loss-making flagship brand are threatened. VC spokesman Frank Blanken warned: "However, if the employer side does not enter into negotiations promptly, the question of appropriate responses will inevitably arise."
Shareholders demand faster restructuring of the core brand
There were also critical voices from shareholders. In particular, the investment company Deka Investment and the Deutsche Bank subsidiary DWS expressed disappointment at the Annual General Meeting that the brand with the crane logo posted losses in 2024 and that a turnaround for the current year is still uncertain. Ingo Speich, Head of Sustainability at Deka, warned: "Lufthansa must get out of its permanent crisis mode.
The capital market wants to see success; announcements aren't enough." Hendrik Schmidt of DWS pointed to the 23 percent loss of the MDax share price last year and called out from a shareholder perspective: "Mayday, mayday, mayday!" This criticism highlights the pressure on management to sustainably improve the profitability of the core Lufthansa brand.
Shareholder approval despite criticism
Despite some strong criticism of the weak earnings performance, the shareholders of Deutsche Lufthansa AG approved all of the management's proposals. These included the renewed distribution of a dividend of 30 cents per share. Furthermore, the compensation system for the Executive Board was changed and the company was given the option of holding future Annual General Meetings online again.
CEO Spohr admitted that the core brand Lufthansa was the only Group company to report losses last year. He cited delayed aircraft deliveries and particularly high site and personnel costs in Germany as the main reasons. Lufthansa therefore expects the new German government to reduce government spending on aviation security and air traffic control. "It cannot be in the interests of the new German government for Lufthansa to only grow outside of Germany," Spohr said.
Almost a year ago, Lufthansa launched a comprehensive restructuring program with 700 individual measures to reduce costs, stabilize operations, and improve service. The goal is to improve earnings by €1,5 billion gross annually by the end of next year and by a total of €2028 billion by the end of 2,5. Spohr emphasized that initial measures, such as fleet renewal and faster processing of customer complaints, are already showing results. He emphasized that Lufthansa, with a 40 percent share of revenue, remains the Group's most important airline, but is suffering from high government-sponsored site costs and sharply increased personnel costs in Germany.
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