First Pan Am, then ValuJet. Malaysia Airlines was the latest example of an airline that went bankrupt because of a deadly accident – among others. And now even Lufthansa, or more precisely it’s 'budget' subsidiary, Germanwings, has to face and master the challenge that the three mentioned airlines could not: To stay in the black after the most fatal tragedy the airline has ever experienced.
On March 24 this year the Germanwings co-pilot Andreas Lubitz allegedly committed suicide by crashing a A320 airplane into a mountainside of the French Alps. 149 people, including five crew members, died with him. The event caused widespread media coverage and international outcries ranging from postulating stricter psychological evaluations for pilots to demanding a change in the safety measures for cockpit doors. Investigators assume that the 27-year old man had locked the door while in the cockpit alone – recordings found on the black box opened up assumptions that the pilot of flight 4U 9525 had tried to open the cockpit door from the outside just before the crash to no avail.
People around the world seem to be hit hard by the tragedy, but Germans appear to be a special case. This plane crash seemed to evoke unusually dramatic reactions – possibly because it is connected to Lufthansa. The award-winning airline had enjoyed a nearly impeccable reputation for more than sixty years, "safety" being their brand recognition feature and always played a large role in how they branded themselves. It had also been unaffected by any accidents for more than two decades. Now the question, if one person's actions are sufficient to blacken Lufthansa's spotless sun-yellow image and which are the contributing factors, may be posed.
Nowadays Germans seem to cherish security more than other nations. Social scientist Daniel Lorenz, who works in disaster research at the Freie Universität Berlin, explains that "on the whole, security surely matters more for Germans than for other societies, but of course it also depends on the person and the area of life." According to psychologist Claudia Ress you also see this in the quality of goods (like cars) that seems very important to Germans, as well as in daily life, for example within traffic, where order seems to have a very high value. The importance of order is also emphasized by law student Marie-Therese Schnappauf, who ties it to the strong regulations in German bureaucracy. Considering "security" in relation to Germany, aviation security also comes to her mind: "I believe, Lufthansa even implemented higher security standards that are statutory, even before the tragedy."
Consequences immediately addressed
Already three days after, however, Lufthansa, together with all national and several international airlines, introduced the "four eyes"-principle in the cockpit, meaning that at least two crew members always have to be inside while the plane is in the air. The new regulation was also taken up quickly by national aeronautical authorities like the Austrian and the Canadian one. Ress is convinced that this principle will make passengers feel more secure. "And you have the feeling that the airline is reacting by taking the problem seriously and is not resting on its laurels from the past." Her colleague Reiner Kemmler, who specializes in aviation and crisis psychology, claims that the new regulations will probably have a calming effect on the passengers. "You can’t foresee right now, however, if repercussions are strong enough as to make people perceive Lufthansa in a different way in the future. Some people don’t even know that Germanwings belongs to Lufthansa, for example."
According to the newspaper Die Welt, on March 27, German aeronautical authorities also decided to launch a brains trust that consisted of political, medical and psychological experts as well as diverse representatives from the aviation industry. On April 8 the two most pressing issues started to be tackled: Discussing if the security measures for cockpit doors have to be changed and how checking the flight eligibility of pilots could be improved. Shortly after, the EU reacted, too, by introducing a similar work group on a cross-country level. In contrast to the U.S., Europe has not introduced any law for the "four eyes"-principle. A further topic for this round might become a radar system that will be expanded by an alarm function concerning the aircraft altitude, as it had become public in the beginning of May that Lubitz had practiced the descent of the airplane on the flight from Dusseldorf to Barcelona – the flight before the fatal one.
At the end of May Lufthansa’s CEO Carsten Spohr told Frankfurter Allgemeine Zeitung that an additional means to control his company’s pilots’ mental and physical health would be unannounced control examinations for them. Furthermore, it would have to be tested, under which circumstances and for which exceptions the responsible flight physician could be acquitted of his or her medical confidentiality.
All in all, it looks like the company is dealing comparatively well with the aftermath of the tragedy. As Frankfurter Allgemeine Zeitung reports, the airline had a lively exchange with Ulrich Wessel, the principal of Joseph-König high school in North Rhine-Westphalia that had lost 16 of his students and two teachers due to the accident. Spohr assured that "our employees keep in touch with the victims' families every day" in the interview with the Hessian newspaper. Additionally, apart from 500 volunteers within the firm, who answered directly to urgent matters, many post-trauma experts worked towards specialized care for the families. Salzl, former chief pilot for Lufthansa, explains why he is "in line with many, who state that the airline, and especially CEO Spohr, have done a good job" in ‘processing’ the time after the tragedy: "The company didn’t try to hide anything and the management did PR work proactively, while staying sympathetic and authentic. Moreover, the CEO seemed to take care of things himself and did not let others speak for him."
Relatives angered by bureaucratic mistakes
Latest developments have shown some indignation by relatives against the airline (and authorities), however: The promised date for the transfer of the deceased from France to Germany could only be upheld for approximately half of the victims, while it will be delayed for the rest due to bureaucratic problems, according to reports by Spiegel online and Die Welt. Psychologist Kemmler adds that although the counselling of the families had been handled well, some will still feel hate towards Lufthansa, "because this is a normal psychological reaction after such a catastrophe. That is also why one has to separate the families’ and reactions from the general public."
But there are other factors playing a role in how the biggest German airline will be perceived in the future that lie outside of its sphere of control: Scholar Lorenz ascribes the media an especially important role when events such as the Germanwings crash happen, "because only through media the public can even get access to the event." He adds that they have a different function at different points in time: "While at first they mostly lay out the facts, later they become more critical and they increasingly look at causes of the event(s)."
In Robert Salzl’s view, the media did and do not seem to have a negative influence on how the airline is perceived as of now. "All in all reporting on this topic was immense. In this case, however, the media seem to have remained with an informative and reactive stance." In short: They performed according to their purpose. The only criticisms directed against national media by the highest media authority in Germany, the German Press Council, concerned the yellow press Bild newspaper for publishing pictures and names of victims and Rheinische Post for reporting about Lubitz’s girlfriend in a fashion that revealed too many details about her.
Surveying the matter on a more individual level one has to ask the question, which role it plays that the accident occurred because of a ‘human failure’, and not a technical one. Kemmler points out the complexity of the issue: "On the one hand nobody would fly if too many technical errors would occur, because one would then determine that it is too insecure. On the other hand it is confusing if a human being, as a problem solver and last decision maker in the cockpit, makes mistakes. Thinking about it, you have to come to the conclusion that as humans we are not flawless. But of course pilots are selected and educated so carefully that they overcome most critical situations." His colleague Ress adds that in the end, human behavior, also counting that of severely depressed people like Lubitz, remains unpredictable. "His psychological report stated that he possibly had suicidal ideas, but that can mean a lot of things: It does not automatically end in actual suicide. For me, Lufthansa is not less secure, anyways, because of this one severely ill person."
Mixed prospects for Lufthansa
Indeed, most of the discussion seems to be a pointer towards persistent trust in Lufthansa. As Ress explains, trust in a company is slowly built up over a certain period of time and based on the company "delivering what it promises." Kemmler confirms this notion and adds that the name of the ‘airline with the yellow crane’ is known and "normally not connected to bad press." According to Frankfurter Allgemeine Zeitung, the Lufthansa CEO even believes that "through the sensitive handling of the crisis our basic values like reliability, transparency or fairness towards customers rather got confirmed than damaged. The passengers’ trust has even been rising!"
Kemmler also compares the case to the crash of a Swiss air passenger plane into the Atlantic Ocean in 1998 carrying 229 people. "You can see parallels and for Swiss Air there was no permanent damage to its image. For Lufthansa, the stock exchange price did not change significantly after the incident, which was a first indicator." Ex-pilot Salzl does not believe in long-lasting harm caused by the accident either, although for him the future of the whole company appears insecure for other reasons: "There are so many cheap offers for consumers, that this high number will be reflected in the offer of quality." Lufthansa, among the world’s ten biggest airlines, is regarded as a rather prestigious company that demands a higher ticket price from passengers than most of its rivals.
Salzl’s argument is echoed by the magazine Focus Online, which in March (before the incident) pointed out several challenges for the airline: it provides unclear products (with Lufthansa on one end of the price range and Germanwings/Eurowings on the other as the budget options), an overall poor business situation, decreasing prices for tickets, competition from other airlines, and a lack of political support (nationally and by the EU). The German government persists on its air traffic tax that is not collected in other European countries, and additionally, airlines are still waiting for a national air transportation plan.
According to Frankfurter Allgemeine Zeitung that quotes Carsten Spohr, reducing costs in passenger transport business, and the maintenance of the financial power are presently the business’ highest priorities. Numbers published by the newspaper state that the current pension burdens culminate to around 15 billion euros. These are 40% of the total assets or 250% of the net assets of a company that is worth only 6.3 billion euros on the stock-market.
Salzl draws a comparison to the legendary Pan American World Airways that declared bankruptcy after a fatal crash in Lockerbie, Scotland, and 64 years in business. In his view, the incident was what eventually "broke Pan Am’s neck", but for the US-airline it had been the last misfortune in a long series of financial problems and aircraft accidents. According to the ex-pilot, Lufthansa has been a reliable airline that represents the two major factors for a successful brand value until this day: "prominence and sympathy."
So will Lufthansa be affected enough to follow Pan America’s fate? Probably not – it has held up a largely unblemished reputation throughout its sixty years of company history and still appears to emanate a sense of trust and security towards the German population. This continued positive impression is helped by the national media who have stayed largely respectful towards all sides and the fact that the role of the scapegoat seems to be passed rather to Lubitz than to the airline, for which he flew. Moreover, there are at the moment enough internal and external experts helping to relieve the company in times of its probably most dire crisis ever. The answer to this being sufficient to outweigh its rough edges on the long-term, remains blurry still, however.