At AUA's parent company, Deutsche Lufthansa, almost the entire management team was surprisingly replaced. Four of the six team members leave the group almost simultaneously. In addition, the supervisory board may eliminate a board position altogether. Only Carsten Spohr, chairman of the board, and Michael Nickmann, the former head of human resources, remain. The airline is threatened by a cabin crew strike – and many flights are cancelled.
Lufthansa shares fell significantly on Friday. By late afternoon, the stock had lost about 3.5 percent — the biggest loss among mid-cap stocks at the MAX. Meanwhile, Lufthansa's share price was at its lowest level since early November. The airline has already lost ten percent of its market value this year.
Lufthansa announced a reshuffle of the board of directors on Thursday evening. Effective July 1, Lufthansa's executive board will have five members instead of the previous six. The reorganization coincides with the departure of four board members.
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Accordingly, the terms of Board Member for “Global Markets and Network Management” Harry Homeister and Board Member for “Fleet and Technology” Detlef Keser expire at the end of June. Additionally, according to reports, Christina Forster, head of the “Brand Management and Sustainability” department, and Remko Steenbergen, CFO, will leave at the end of June “by mutual consent” in early May. Michael Nickman, committee member for human resources and infrastructure, will temporarily take over the finance department in addition to his previous duties until the office is filled.
The scale of the changes will raise eyebrows and raise concerns about the risks the moves could pose, commented RBC analyst Ruiri Cullinane. Much of the focus is on CFO Steenbergen's departure, wrote Harry Gowers, an analyst at US bank JP Morgan. Steenbergen did a very good job consolidating the balance sheet, restructuring the cost base, and then pulling Lufthansa out of the recession. Financial strategy is now becoming more ambiguous.
“After successfully overcoming the corona crisis and the aviation and economic turnaround, the Lufthansa Group is starting the next phase of its corporate development with the reorganization of the board of directors,” the Lufthansa statement said in its justification.
“With a new pace and a changed team”
Chairman of the Supervisory Board Karl-Ludwig Klee said the challenges facing the industry and the company were different than in previous years, but they were also huge. “We want to approach it with renewed energy and a transformed team that combines even more international experiences and diverse perspectives.” Clay also expects a strong understanding of teamwork.
Grazia Vittadini, currently Special Advisor to Rolls Royce, will be reappointed as Head of Technology and IT at the Group on July 1, 2024, according to the decision of the Supervisory Board.
Effective July 1, 2024, Dieter Vranckx, currently CEO of subsidiary Swiss International Airlines, will be appointed to the Board of Directors for “Global Markets and Business Control Centers.” With his move to Frankfurt, Vranckx will take Steenbergen's mandate as deputy chairman of Swiss Air's board of directors. Lufthansa Board Department “Group Finance” must be filled.
Additional uncertainty due to new risk of strikes
In addition to extensive board restructuring, the new threat of strikes caused additional uncertainty among Lufthansa shareholders. On Thursday, the UFO union announced the failure of collective bargaining for about 18,000 cabin workers. He called on his members to decide on strikes by March 6 in next week's strike referendum. Another high-level meeting of the Independent Flight Attendants Organization (Ufo) in Frankfurt declared that Lufthansa did not offer enough.
“We don't want to go the expansion route, but we have no alternative unless Lufthansa responds to our reasonable demands,” said UFO president Joachim Vázquez Burger. The cabin has reasonable demands. During the crisis, workers made huge concessions to protect jobs. Burger said he expects a high turnout in the referendum.
The union had already unilaterally broken off pay negotiations for the parent company's flight attendants at the end of January and appeared ready to fight. He terminated the collective wage agreement for the Lufthansa cabin at the end of 2023.
Lufthansa now faces an escalation of the next collective bargaining dispute. At the airline, pilots of its subsidiary Discover recently went on strike to force a preliminary collective agreement.
In addition, a second warning strike by ground staff this week nearly paralyzed Lufthansa operations. Hundreds of flights were canceled and more than 100,000 passengers had to reschedule. A quick deal with the Verdi union is not in sight.
Collective bargaining is also underway for the Air Force. A nationwide warning strike organized by Verdi in early February also canceled large numbers of flights.
