Lufthansa, Admitting It Knew of Co-Pilot's Depression, Is Under Pressure

Frankfurt, Germany:

Lufthansa was supposed to be celebrating the 60th anniversary of its postwar rebirth this month.

Instead, on Wednesday, the day of that anniversary, the German airline faced perhaps the worst crisis in its history after admitting that it was aware that the co-pilot who deliberately crashed one of its planes in the French Alps last week, killing himself and the other 149 people on board, had a history of severe depression.

In Germany, the home country of nearly half of the victims, anger was increasingly directed toward the airline and its 48-year-old chief executive, Carsten Spohr, who only a week ago was boasting that Lufthansa had the best pilots in the world.

Spohr and Thomas Winkelmann, the chief executive of Germanwings, a low-cost subsidiary of Lufthansa that operated the plane that crashed, visited the French village of Seyne-les-Alpes near the crash site on Wednesday.

"We are learning more every day about the cause of the accident," Spohr told reporters in France. "But I think it will take a long, long time for all of us to understand how this could happen." Spohr did not respond to questions shouted by the reporters.

In the German town of Haltern am See, residents gathered to remember the 16 students and two teachers killed on Flight 9525 as they returned from an exchange trip with a Spanish school near Barcelona, the flight's departure point.

Lufthansa said late on Tuesday that in 2009, Andreas Lubitz, the co-pilot, had told the flight school operated by the airline about a "previous episode of severe depression." Lubitz provided the information about his depression after he had taken a break of several months from the flight school and was trying to resume his training, Lufthansa said.

The airline's admission and the likely effect on its reputation come as it is facing a long list of serious challenges, including heightened competition on both short- and long-haul routes and tense relations with the pilots' union that have led to a series of costly strikes.

"At a time when Lufthansa was already facing significant competitive and industrial relations challenges, this tragedy only places more pressure on the company's management," said John Strickland, an independent aviation industry consultant in London.

On Tuesday, the German tabloid Bild and Paris Match, a popular French magazine, claimed to have obtained video from a mobile phone recovered from the crash site that depicted chaos aboard the plane in the final seconds before it crashed.

But French officials have expressed doubts about the veracity of those reports. On Wednesday, Brice Robin, the Marseille prosecutor in charge of the French criminal investigation, said no videos were currently among the evidence held by investigators.

"In the event that someone is in possession of such a video, they should promptly give it to investigators," Robin said.

Statements made by Spohr last week, in which he insisted that Lubitz had been fit to fly, are now coming back to haunt him. The Westdeutsche Zeitung, a newspaper covering the region that includes Dusseldorf, the German city to which the plane was flying, said Lufthansa's admission that it knew of Lubitz's mental health problems was "a helpless attempt to prevent company chief Carsten Spohr, with his fatal words '100 percent flightworthy,' not to appear as a liar ripe for resignation."

The possibility that a pilot was able to hide problems well enough to keep flying could also blemish one of Lufthansa's main selling points, its reputation for technical excellence and safety. Until last week, Lufthansa and its subsidiaries had not had a fatal flying accident in 22 years.

Since taking over as chief executive of Lufthansa in May, Spohr has responded to competition from no-frills airlines like Ryanair by putting more emphasis on Germanwings.

But questions are being raised about whether European procedures allow inexperienced pilots to have too much responsibility. Lubitz had 630 hours of flight time when, according to investigators, he slammed the Airbus A320 into a mountainside. Lubitz had apparently locked the more experienced pilot out of the cockpit.

"How was it that this guy could have had only 630 hours and already be flying an A320?" said Amy Fraher, a former U.S. Navy commander and United Airlines pilot. "It is a big, sophisticated aircraft with a lot of power and, in this case, 150 people on board."

"It troubles me," said Fraher, who also lectures at the University of Birmingham in Britain.

"I see evidence that, in the interests of cost-cutting, pilot training has become condensed" to a just a few years, rather than the seven or eight years that was once the industry norm worldwide, she said. "Such an accelerated career path doesn't give young pilots time to become more professional and properly seasoned."

Others, however, doubt that Lufthansa's training practices played a role in the Germanwings crash.

"We have no evidence there has been cost-cutting on safety," said Christoph Drescher, general secretary of the European Cabin Crew Association, which represents flight attendants.

"The colleagues from Germanwings are very well trained," Drescher said. "The regulatory standards are upheld and exceeded."

Spohr, who has held numerous management roles in his 20 years at the Lufthansa group, including stints running its global airline partnerships and cargo businesses, is also a licensed Airbus A320 pilot. He was the head of the main Lufthansa passenger business before assuming the role of chief executive.

Analysts with knowledge of the company describe him as generally well liked and respected among the group's 118,000 employees, and in particular among its 5,400 pilots.

Speaking to a small group of reporters in Frankfurt in December, Spohr said his background as a company insider was an asset at a time of rapid change.

"I have my roots probably in the perfect soil," Spohr said then. "I know our weaknesses; I didn't start from scratch."

At the time, however, some analysts privately worried that Spohr's reputation as a nice guy was a handicap when Lufthansa was under intense pressure to move quickly to reduce costs, particularly those associated with labor and retirement benefits, which represent around one-fifth of the airline's annual revenue.

Efforts to scale back an early retirement deal for pilots, alongside changes to pay and working conditions, have been at the heart of the series of strikes by Lufthansa's pilots over the past year - including a three-day walkout in early December that forced the cancellation of thousands of flights.

Germanwings pilots, who work under a separate contract, have largely refrained from joining the strikes, although they did stage a two-day walkout in February that resulted in the cancellation of more than 300 flights.

Those strikes, and others by security staff members, cost Lufthansa a total of 232 million euros, or about $250 million, in 2014, contributing to an 11 percent drop in profit at its core German airlines division, made up of Lufthansa and Germanwings.

But the unions have rallied around Lufthansa and Germanwings since last week's crash, and they have declined to criticize airline management.

Lufthansa reported a net loss of $460 million in the last quarter of 2014, which it attributed largely to one-time factors like an increase in pension contributions.

It is certain that the victims' families will file lawsuits. However, Lufthansa shares were little changed Wednesday, probably because most of the expense from lawsuits would be covered by insurance. The share price has fallen 7 percent since the beginning of the year.

Until last week, Lufthansa and its subsidiaries Germanwings, Eurowings, Austrian Airlines and Swiss had not had a fatal accident since 1993. For the flagship Lufthansa brand, the worst fatal accident ever was in Nairobi, Kenya, in 1974, which killed 59 of the 157 people on board, according to Ascend, an aviation consulting firm based in London.

Lufthansa was founded on April 1, 1955, using the same name as a bankrupt predecessor.

The company had already postponed indefinitely an anniversary celebration that had been planned for April 15. Instead, Lufthansa will take part in a memorial celebration for the victims planned for April 17 in the main cathedral in Cologne, Germany.