Lufthansa

analysis of The new chairman was Heinz Ruhnau, a career bureaucrat with strong affiliations with the West German Social Democratic Party. His appointment generated an unusual amount of concern because many feared the ruling Social Democrats were attempting to politicize the airline. Ruhnau was an undersecretary in the Transport Ministry and a former chief assistant to the head of West Germany's largest trade union, IG Metall. He did not, however, have experience in private enterprise, and Lufthansa was being prepared for a further privatization of its stock. In 1985, the federal government held 74.31 percent of Lufthansa, 7.85 percent was held by government agencies, and the remaining 17.84 percent was held by private interests.

Ruhnau assumed his post on July 1, 1982, in a smooth transition of leadership. Ruhnau's immediate tasks were to improve Lufthansa's thin profit margin and win the support of the company's 30,000 skeptical employees. The company's performance in 1982 was impressive and resulted in its selection as airline of the year by the editors of Air Transport World.

The early to mid-1990s was a period of enormous change in Europe, change that proved extremely challenging for Lufthansa. Most obvious was the 1990 reunification of Germany, a difficult process that nonetheless afforded Lufthansa the opportunity to fly to Berlin under its own colors for the first time since the Allied occupation. The period also featured steadily increasing competition which forced down ticket prices worldwide and cut into Lufthansa's market share. The company was particularly vulnerable because of its cumbersome bureaucracy and its relatively high-wage workforce, with the workers traditionally protected by the company's state-run status. Other forces reshaping the operating environment for Lufthansa included the gradual deregulation of the airline industry in Europe, the trend toward privatization sweeping the continent, and the planned economic integration of Europe during the 1990s. By the turn of the 21st century, Lufthansa had made numerous changes in response to these challenges, emerging as a very different company.

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