Mayrhuber back at Lufthansa, as Chairman this time

[sn26567]

Wolfgang Mayrhuber, the former Austrian CEO of Lufthansa who left in 2010 to be replaced by current CEO Christoph Franz, has been elected as Chairman of the Supervisory Board of Lufthansa at the last shareholders meeting with 62% of the votes.

There was a heavy opposition to his election, because, after an acquisition policy who made him buy Swiss and Austrian Airlines, he left Lufthansa with a pile of debts, and as a result his successor must now slash costs and overhaul the company's strategy. Furthermore, Mayrhuber first withdrew his candidacy a couple of days ago, just to reinstate it the day before the meeting.

Clashes in view between the Chairman and the CEO?

[RoMax]

He withdrew his candidacy because of a disagreement with some of the shareholders that think Mayrhuber has already too much functions in big German companies. But other, bigger, shareholders expressed their support for Mayrhuber so he was a candidate again..

The biggest opposition on Mayrhuber is not about Swiss, but more about Austrian, SN and BMI. BMI failed and Austrian and SN are still working the way up, which is going slower than LH/Mayrhuber expected/hoped back in 2008-2009.

It's not secret that the new ceo doesn't share all of Mayrhuber's ideas, but that's not the main reason his appointment was a bit difficicult.

[tolipanebas]

His candidacy was opposed by a handful of transatlantic institutional investors which are known to be in for quick money only and have a long standing dispute with him and Lufthansa over the corporate strategy of not aiming at the highest possible quick gain, but rather building the group out over the long term: mergers/acquisitions which do not yield immediate profit are of no obvious value to these investors and in their view there have been too much of these in the past; it's good to see the Anglosaxon mentality of corporate shortsightedness isn't prevailing at LH, because over the past decades the German flag carrier has shown to be one of the most solid and robust airlines in the world, coping much better with adverse economic conditions than most of its competitors which were all praised for their allegedly superior strategies at some point: patience, quality and careful planning always pays off in the end. If your sole target is the next Q, you're not going to have a very robust business in the long run and as a life long "Lufthanseat" Mayrhuber fully understands that!

[Flanker2]

In my view, where Maryhuber can be described as a "destroyer", Frantz is an "aircraft carrier".
The victim: "rowing boat" Lufthansa.

I'm not an anti-management guy, quite to the opposite. But what has to be said is that what has been going on at airline managements throughout Europe is a true disgrace.

Maryhuber has a vision of consolidation for consolidation's sake. All his business plans were unrealistic and he bought SN without really knowing what to do with it. Frantz wants to strip Lufthansa naked, which is the reverse.

LH went from a "socialist" regime to a "capitalist" regime from one day to another.

I don't see the current traditional airline business surviving the next decade in this form. It won't surprise me if someday LH Passage and all the subsidiaries come under LX. In the same way, I see AF/KL tip over towards KL as we move forward.

LH Passage is not a solid airline business. They are booking losses over losses, have very low EBITDA compared to revenue when they do make a profit. It can not be qualified as a lucrative part of the company.
I can see why institutional investors would want to invest in LH, hoping that there will be big changes and the profitability increases. But as long as LH keeps producing these amateur CEO's, it's mission impossible.
LH doesn't need Maryhuber at its head, they need dedicated CEO's like Chew Choon Seng or MOL.

At SQ, the new CEO is destroying everything Chew built over the years. No doubt that if MOL leaves FR without a decent replacement, FR will go down.

The CEO plays a huge role in airline management and other forms of management.