Lufthansa chief quits in surprise move to Roche

Bloomberg

Tue, Sep 17, 2013 - Page 15

Deutsche Lufthansa AG announced the surprise departure of chief executive officer Christoph Franz, who will become chairman at Swiss drugmaker Roche Holding AG, leaving the German airline in limbo as it works on a turnaround.

Franz, whose term expires on May 31 next year, told Lufthansa he was not available for an extension, the Cologne-based airline said in a statement yesterday.

The company did not announce a successor.

Franz will take over from Franz Humer at Roche, the Basel-based company said in a separate statement.

Franz, who lives in Zurich after leading Lufthansa’s Swiss subsidiary, took the top job at Lufthansa in 2011 and embarked on a savings program that included 3,500 job cuts and a renewal of the fleet with more fuel-efficient models.

Humer led Roche for more than a decade, and his departure coincides with a change of guard at cross-town rival Novartis AG, where Daniel Vasella handed the chairman reins to Joerg Reinhardt.

“This is the right time for change in leadership,” Franz said, adding that he opted to depart for “professional reasons.”

“Taking the decision was anything but easy after 15 years at the Lufthansa Group,” he said.

Franz is leaving half-way through the so-called score program, a plan to lift operating profit to a record 2.3 billion euros (US$3.3 billion) by next year, which includes moving many short-haul flights to discount unit Germanwings.

Lufthansa is preparing to announce as soon as this week its biggest fleet order ever, with more than US$14 billion in purchases planned from Boeing Co, the world’s biggest planemaker, and Airbus SAS, people familiar with the plan said.

The departure comes four months after Franz’s predecessor, Wolfgang Mayrhuber, withdrew his candidacy to join the supervisory board over investor opposition, only to change his mind 12 hours later.

Among possible successors for Franz is Carsten Spohr, who leads the Lufthansa passenger subsidiary, the company’s largest unit, and is a trained pilot.

“It’s disappointing that one of the key protagonists in pushing through the score program is departing before its completion,” said Donal O’Neill, a Dublin-based analyst at Goodbody. “But I suspect there are plenty of internal and external candidates who can take up the role.”