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LUFTHANSA'S SUCCESS STORY

The lift goes to the lowest floor. Here, where there is no daylight, a long path lit by neon lights turns to the right then to the left and again to the right and eventually leads to a steel door. Behind the door almost one century of aviation history can be found: the story of the German Lufthansa. In the Cologne archives of the LH everything from the first day onward has been documented.

During World War I AEG founded the Deutsche Luft-Reederei GmbH (DLR). However, only two years later on January 8 1919, it is registered for civilian air traffic and based in Berlin-Johannisthal. The DLR, which carries the stylised crane as its trademark, is one of the forerunners of the German Luft Hansa AG. Before the first passengers use an aircraft, only mail and newspapers are transported. But then things happen quickly: In February 1919 the DLR transports 19 passengers from Berlin to Leipzig. Only one year later there is a regular flight connection between Holland, Denmark and Germany. The DLR co-operates with the Koninklijke Luchtvaart Maatschappij (KLM) and Det Danske Luftartselkab (DDL). This is one of the first "airline alliances".

The "wild" twenties are marked by consolidation and air travel agreements. In 1921 the AEG, HAPAG and Luftschiffbau Zeppelin join together in Berlin to form the Aero-Union AG. The DLR becomes part of this union. While Albert Einstein is awarded the Nobel Prize in theoretical physics, a German Russian air traffic company under the name "Deruluft" is founded by the Russian Trade representation and the Aero-Union. Six months later on 1 May 1922 this company starts a regular service with Fokker aircraft between Königsberg and Moscow. The aircraft fly along railway lines during the day for navigation. Night flights and air traffic control as we know them today are still a long way off. The legal regulation of air traffic is documented in the first air traffic law for the German Reich, which becomes effective from August 1922.

However, not everything runs smoothly in those days. Conditions for air traffic tightened in Germany. The Germans were not allowed to construct aircraft as was agreed by the Allies in the "London Ultimatum", which enforced the agreements of the Versailles Contract. The frightening increase in the inflation rate had a negative effect on aviation, the newest means of transport. The exchange rate is about DM4.2 trillion for $1 in 1923. The money is passed across counters in washing baskets. However, nothing seems to be able to stop the development of air traffic in Germany. Together with the Lloyd Air Service GmbH the Aero-Union forms the Deutsche Aero Lloyd AG (DAL). The airport, which is used as the base for this new organisation is Berlin-Tempelhof, which was opened on 8 October 1923. Even overseas (Columbia) airlines and syndicates are being created with German involvement. The aim of these is to look into the possibility of establishing air traffic with large seaplanes in South America. The Air Traffic Department of the Junkers Works evolves into the Junkers Luftverkehr AG (JLAG) in August 1924. However, the new airlines, which are being subsidised by the Reich compete fiercely with each other. Both fly from Berlin and everything seems to be done twice: the flight control, storage of spares and courtesy services to the most remote airports and to the same route net. There simply are not enough passengers to make two airlines viable. For these reasons, and because finances are a bit thin on the ground, the Reich's government is no longer prepared to subsidise both companies. Consolidation seems to be the only way to warrant a viable airline.

Then it finally happens: On 6 January 1926 the Deutsche Luft Hansa AG is founded in Berlin's elegant hotel Kaiserhof. The crane logo is taken from the DLR (Aero Lloyd) and the colours blue/yellow from Junkers. Soon afterwards 165 Luft Hansa aircraft are operated with these trademarks. The Reich has not given Luft Hansa the sole right for air traffic. However, only this airline is subsidised. Finally the state maintains a direct influence on the company, because of the financial aid it receives; only 27.5 per cent of shares are privately owned. From the Reich's capital Berlin, or to be precise from Tempelhof, the Luft Hansa services a route net reaching from Moscow to London and from Stockholm to Budapest. During 1926, the first year of the company's existence, the German-French tension deriving from World War I are put aside, and the London Ultimatum, which prohibited aircraft construction is loosened. This meant that the aviation industry could start to revive. In addition to this Luft Hansa and the French Lignes Farman opens the Berlin-Cologne-Paris route - a milestone in international co-operation in air traffic.

And something else equally noteworthy happens this year: after several training flights a Luft Hansa Junkers G24 finally takes off at 2am on 1 May with nine passengers and three crew from Berlin to Königsberg. This first night flight with passengers uses a "light road" in a northerly direction for navigation. There are swivelling floodlights every 20 to 25 km and in between are neon lamps or gas beacons fixed to masts or house gables. The Junkers G24 is also fitted with headlights and magnesium lights are fixed to its wings.

In its first year Luft Hansa aircraft cover 6,537,434 flight kilometres and 56,268 passengers are carried; today Lufthansa handles this many people in two hours. Furthermore, 946 tonnes of mail and freight are transported. The new company has 1,527 employees at this stage. It is a modern, dynamic firm bursting with ideas. In August 1927 the Luft Hansa establishes a combined flight and rail traffic (Flei-Verkehr) together with the Deutschen reichsbahn (German Railway System). With it goods are transported to their destination using a combined air and ground transport. A year or so later the Fleiper-Verkehr (air-rail-car-traffic) is created. The Reichsbahn and Luft Hansa make an agreement, where a flight ticket can be exchanged for a First Class railway ticket if the flight is cancelled. Through this initiative, co-operation between air and rail traffic becomes even closer. In these days no one has heard of the term "intermodality", a phrase which is often used today to describe the linking of different means of transport. Although co-operation is good, flying has one main advantage: it saves time. The Deruluft for example, in which Luft Hansa has a share of 50 per cent, managed to cover the Berlin-Leningrad route in 14 hours, which means a saving of 56 hours compared to the train.

Although the global economic crisis at the end of the twenties left existential scars, Luft Hansa manages to fulfil its wish for international co-operation. At the beginning of the thirties while Marlene Dietrich causes a sensation with her film "The Blue Angel", Luft Hansa founded the "Eurasia Aviation Corporation" together with the Chinese government. The initial aim is to create a direct mail link between Berlin and Shanghai. On 31 May 1931 Eurasia officially starts her flight operations to the Far East. In the west the world's tallest building at 381 meters, the Empire State Building in New York, has just been completed.

The tremendously fast technological advancement continues into the thirties. During the general meeting on 30 June 1933, it is decided that the Deutsche Luft Hansa should be known as Deutsche Lufthansa. The driving force behind this change is a member of the Board of Directors, Carl August Freiherr von Gablenz. Regularity and being on time are part of air traffic, which means that one has to free oneself from the weather and other variable conditions. In parallel with the technological improvement of onboard equipment, von Gablenz pushes forward the training of blind and instrument flight. In these days the aircraft best suited for blind and night flights was the backbone and "work horse" of the Lufthansa fleet, the Junkers Ju 52. 80 aircraft, each costing Reichsmark 275,000 are flying for this airline. Fitted with the "Junkers Auxiliary Wing", a forerunner of the landing flap, the Ju 52 is able to reduce its landing speed to 95 km/h. This enables it to use airports which are not suitable for other three-engined aircraft. In these days the fastest aircraft is the Heinkel He 70, with which the LH establishes a "lightning service" from Berlin to Frankfurt, Cologne and Hamburg in 1934. Within eight years of her founding Lufthansa has already transported more than one million passengers. The airline is also busy with forging alliances. Air France, Lufthansa and Deutsche Zeppelin Reederei sign a first agreement about the co-ordination of flight schedules and tariffs in their South Atlantic Service.

In 1938 Lufthansa achieves its first speed record on the route Berlin-New York-Berlin. The following was reported in the "Wochenschau": "The Focke-Wulf Aircraft "Condor" with Flugkapitän Henke and Hauptmann Moreau at the helm crossed the Atlantic in a very precise fashion and returned to the Reich's capital after a twenty hour flight". LH's motto has always been "convince through performance". After all the company advances to be the top European airline with a fleet of 150 aircraft and a route net of 80,000 km. Its share in global air traffic is 7,5 percent.

A few days before the outbreak of World War II Lufthansa stopped all flying operations on 31 August 1939. However, the company re-started operations in Europe a month later at a reduced rate. International connections with Russia, China or South America fell victim to the war. Foreign LH shares as for example those in the Spanish airline Iberia Compania Aérea de Transportes S.A. are sold in the forties. It is obvious that Lufthansa as a state company is not untouched by national fashism and gets directly involved in the war. For example it has to lend aircraft to the Luftwaffe. At the beginning of May 1945 flight operations are stopped completely.

The post war years are extremely hard. Everything in Germany has to be built up again. Everything apart from air traffic. The allies forbid the Germans to own, construct and operate aircraft. Whoever had made a living in aviation, is now empty handed. Lufthansa's employees lose their jobs and have to find employment elsewhere. This is not easy, because they are not welcome everywhere as employees of a company, which was subsidised by the Reich - the swastika had not lost its terror. This is why many suffer great hardship.

On order of the allies, Lufthansa is liquidated on 1 January 1951. However, even in the same year Hans M. Bongers, on orders from the Federal Minister of Transport Seebohm, tackles "the question of future German air traffic" with success. Barely two years later on 6 January 1953, the "Aktiengesellschaft für Luftverkehrsbedarf " (Luftag) with a base in Cologne is founded. Bongert becomes the commercial director and the engineer Gerhard Höltje is the technical director of the new company. At the end of June 1953 Luftag orders its first aircraft: four Lockheed Super Constellations and four Convair 340, which are built by the Consolitated Vultee Aircraft Corporation (Convair). Furthermore the company signs a long-term hire contract with the Hamburg Airport Company. A large maintenance plant is built. In later years Lufthansa's technical headquaters are to be based here.

On 6 August 1954 the shareholders' meeting of the Luftag takes the decision to re-name itself "Deutsche Lufthansa Aktiengesellschaft". This name has been aquired from the old "Lufthansa AG in liquidation" though the new company is not the legal successor. The new and second Lufthansa has been born. However, before any aircraft can become airborne as planned for 1 April 1955, qualified staff have to be trained. Former captains have to be retrained to fly new aircraft. There is hardly any new talent from Germany and some pilots manage to get their training and licenses abroad. Fritz Stehle, one of these and now a retired LH flight captain, remembers: "I did not cost the Lufthansa one penny, because I went abroad shortly after the war. I was able to gain civilian American flight licenses with one of Air France's daughter companies. With these I could work for six months as co-pilot and later as captain for three years with this company, before I swapped over to LH in September 1955. It was the re-birth of a company, at which some "personalities" of the old Lufthansa still had some say. At the beginning we were only four German captains, who had already some experience in civilian aviation with new aircraft - as opposed to the former captains. They would not have been able to pick up from where they had left off in 1939. Of cause there were some differences in opinion as far as the running of proper flight operations were concerned".

American captains from TWA (Trans World Airlines) help out simultaneously at Lufthansa, because there are hardly any German pilots. This has not been very easy for the Germans, says Captain Stehle. "While we were earning only DM1,200 before tax in the beginning, captains of a Super-Constellation servicing North Atlantic traffic earned the equivalent of DM12,000. When further foreign captains were being employed later on who earned $2,000 (then about DM8,000), we demanded a pay increase, about half of the above sum. However, these demands were rejected. Later our pay was brought into line with theirs".

Margot von Engelmann, one of the first stewardesses knows that things are tough. "Our monthly salary was DM428 plus DM105 flight allowance, if we had actually flown. If we just stayed on the ground or were ill, this bonus was not paid". One could hardly buy a flat or a car - a VW Beetle cost DM4,200 in the mid 50's. "We all lived in furnished flats for about DM80 per month". Nothing was given away even in the time of the German "economic miracle". Flight pioneer Margot von Engelheim knows that, "in those days you had to work very hard for your money. My longest flight from house to house took 32 hours. It started with delays and an engine change in Shannon (Ireland). Everything went wrong. We were not able to land in New York, but had to transfer to Baltimore. Since it was a Sunday afternoon the customs officer in charge had to be brought from the golf course. In the meantime the three of us had to look after an eighty-year old lady, two babies and a large dog. Finally everyone went by coach from Baltimore to New York, where we arrived rather exhausted. But there was no other possibility, you just had to get through it. There was no relief anywhere, where could they have waited for us? Later everything changed. Everyone knew exactly what was written in their pay agreement and no one flew longer than 14 hours".

The young company tries to save money everywhere it possibly can. In the impending jet era LH is determined to be at the forefront of technology with the most modern flight equipment. It does not take long before Lufthansa orders its first Boeing 707-400 at DM22 million. By now these things can be done by telephone and the first telephone cable connects Europe with the USA since 1956. A year later Lufthansa receives a Boeing-707-Simulator. By now the foreign captains, who helped with the training and expansion of the LH fleet, have to say farewell. In the early 50's about 1,100 employees ensure that operations run smoothly. This means that Lufthansa transports about 104,000 passengers in 15,900 flight hours over 5,066,000 flight km during scheduled and special flights. On top of this there are 1,000 tonnes of freight and 500 tonnes of mail. In all 12 airport destinations are flown to. Only Berlin - because of its special status imposed by the allies - can not be used. "Another" Lufthansa forms there in the mid 50's (cp box). While trying to expand the inner European route network LH tries to get an international foothold. During the next few years more than 80 bilateral air traffic agreements are signed with various countries, e.g. the USA, Great Britain and France.

From the very beginning Lufthansa acts according its motto "Service at the highest Level". And since flying is not exactly cheap in these days, (a return flight to New York costs DM3,600), Lufthansa transports many celebrities like Audrey Hepburn, Toni Sailer or the German Chancellor Konrad Adenauer. Margot von Engelmann recalls, "It was a great time, especially because we were given the opportunity to fly. In those days there were no charter or cheap flights. Any ordinary citizen could not afford flying. Only big business men and politicians flew. However, that was not unusual for us, we were not in awe of these people. We did not fuss over them".

In the sixties the pace quickens. The catch phrase is "Time is Money" even for Lufthansa. With her Boeing 707s the company is well prepared for long haul flights. However, the competition is not asleep either, things are getting tough: the costs of fares drop because the number of available flights, particularly on the North Atlantic routes, keeps rising. There are more passengers as well, but not enough to fill the increased capacity. At Lufthansa with Frankfurt as her base, the number of passengers doubles from 786,000 in 1959 to over 1.5 million in 1961. Although revenue rises and costs reduce, Lufthansa is unable to make profit. Despite the difficult situation there are still a host of ideas, and the fighting spirit remains unbroken. In these early years of the airline it is apparent that the organisation will become an important airline group. The "Deutsche Flugdienst GmbH", a pure LH subsidiary which in 1961 changes into the "Condor Flugdienst GmbH" is already in existence. 36 years later the holiday airline becomes part of C&N Touristic AG owned by LH and Karstadt.

In December 1964 things are starting to improve. LH flies into profit with its first positive yearly balance of DM36.9 million. During the next year a lot of money is invested. LH becomes launch customer" for the short haul jet Boeing 737 (at DM13 million each) with 21 orders, which becomes the world's best selling aircraft. In 1966 Lufthansa enters the era of the wide-bodies. LH orders three Boeing 747 at a price of DM105 million each. The first of these jets is delivererd in 1970.

But the company undergoes some more re-structuring. Lufthansa takes the quick decision to combine on-board service enterprises in Frankfurt, Hamburg, Munich and Cologne and creates the "Lufthansa Service GmbH" on 26 April 1966. Today. this company is better known as "LSG Sky Chefs" after joining with the American caterer Sky Chefs. All in all, 1966 turns out to be a successful business year for LH: its turnover is over one billion for the first time. At the end of this turbulent decade student upheaval is ringing in a new, darker era.

The seventies become the decade of terror, and this is also true for Lufthansa. There is hardly one year during which a Lufthansa aircraft is not hijacked. The worst event of all is the hijacking of the Boeing 737 "Landshut", which is taken over by Palestine terrorists on 13 October 1977 while flying from Palma de Mallorca to Frankfurt and is being kept in Mogadischu until 17 October. Flight Captain Jürgen Shumann is murdered. However, before further hostages are shot, a GSG-9 Commando is able to free all passengers. The terrorists' intention was to free some Rote Armee Faktion (RAF) -Terrorists, who in turn commit suicide after the attempt had failed. Other RAF-Members threaten that for each of their dead, one Lufthansa aircraft will be blown up. Bookings for LH flights decrease accordingly.

However, the day to day running of the LH business has to go on. One has to think of the future, especially of the employees' future. New aircraft like the Douglas DC-10 start operating and three Airbus A300 are also purchased. Apart from this LH comes up with the idea to combine all involvement in the various business areas with the aim of promoting, enlarging and safeguarding the core business of the company with the help of a unified leadership. For this reason the "Lufthansa Commercial Holding GmbH" is created in 1973. The growing importance of cargo business is also recognised, which leads to the foundation of the "German Cargo Services GmbH", a subsidiary for cargo charter flights. In 1978 the first step of construction of the Lufthansa Cargo Centre at Frankfurt Airport was celebrated. During the same year LH buys a 26 percent share in the "Deutsche Regional Luftverkehrsgesellschaft GmbH" (DLT), which is to become a subsidiary completely owned by Lufthansa and is to be known as Lufthansa CityLine from 1993 on. At the end of 1970 LH sails out of the rough patch.

The following decade shows a significant growth in all branches of industry. The healthy economy fills the jets' cargo holds with expensive goods, which have to be transported urgently. Passenger numbers increas year upon year - air traffic is flourishing. However, a certain degree of disquiet is also to be felt. Deregulation and liberalisation of air traffic, which had been in full swing in the USA since 1978, is also felt in Europe. While competing travel sales systems are fighting mercilessly for market shares all over the world, consolidation grows in the airlines industry. Lufthansa does not acquire, but she co-operates "everywhere where we were not able to fulfil the task ourselves, or where it serves the long term safeguarding of our market position", stresses the former LH Chairman Heinz Ruhnau. This is why Lufthansa, Air France, Iberia and SAS sign a fundamental contract, paving the way for the joint travel sales system Amadeus. On 9 September 1988 Air France and Lufthansa founded the French airline "EuroBerlin", in which LH had a 49 percent share. This airline commuted solely between the Federal Republic and Berlin, which enables Lufthansa to fly to Berlin this way - two years before she was officially permitted to do so. A joint venture agreement between Cathay Pacific and LH about daily flight connections between Frankfurt and Hong Kong as joint service is signed. During the 80's Lufthansa develops marketing strategies to promote customer loyalty. The "Fly and Save Tariff", the "Lufthansa Savings Book" or the comprehensive frequent-flyer program are introduced. The airline also takes on a 33.3 percent involvement in Transrapid, which has not yet started operating. In 1982 the Lufthansa Airport Express transports passengers from Düsseldorf to Frankfurt for the first time. Later LH and the German Railway System sign a joint agreement for further co-operation.

In 1989, Engineer Jürgen Weber has just become deputy member of the Board of Directors, Lufthansa starts her first "two-engine" scheduled flight across the North Atlantic. From now Airbus A310-300 are to fly the route Frankfurt-Montreal-Philadelphia. Although LH transports 20 million Passengers for the first time, the company has to finish the year on a sad note: Dr. Alfred Herrhausen, Member of the Board of Directors at LH and executive Spokesman of the German Bank, is murdered by RAF-Terrorists.

At the beginning of the nineties, global aviation has to endure its worst crisis. However, in October 1990 there is a bright spot for Lufthansa: The airline is permitted to fly to Berlin again. Chief of the Board of Directors Heinz Ruhnau: "Lufthansa flies to Berlin again. This is the most important day in the company's history since World War II, because we are returning to our place of birth, to our roots. Lufthansa was founded here in 1926". This historic moment, however, can not disguise the reality: the effects of the Gulf War can be felt, and fiercer competition along with the economic crisis are taking their toll. There are fewer passengers and cargo, which results in losses amounting to millions. Employees have to be made redundant and aircraft have to be stored in the desert. The existence of Deutsche Lufthansa is threatened. Only re-structuring, redevelopment and finally global partnerships with other airlines help the company to escape her dire situation. In 1993 United Airlines and Lufthansa sign a co-operation agreement, which creates one of the most important airline alliances: the Star Alliance. Jürgen Weber, by now Head of the Board of Directors is convinced of this and when the Scandinavian SAS joined, he announced, "We have got the world's strongest aviation alliance".

Lufthansa today is an important aviation corporation with global presence, which tries to strengthen its position by expanding in all areas. The last chapter in the long Lufthansa saga was not yet written, when the steel door was shut.

From page 10 of FLUG REVUE 12/99