Deutsche Lufthansa AG (LHA) Earnings Call Transcript & Summary

[Interpreted] Ladies and gentlemen, shareholders of Lufthansa, I hereby open today's Annual General Meeting of Lufthansa. This year given the COVID-19 pandemic, it is held exclusively in a virtual format without any physical presence of shareholders. This is why I would like to welcome all shareholders and those watching us online. All our best wishes to you, your families and friends in these testing times. Today's AGM is broadcast in its entirety on our Investor Relations website until we start with a question-and-answer session. The broadcast of the AGM is available to the general public. I would also like to welcome, on behalf of the Executive Board, the CEO of the company, Mr. Carsten Spohr; and Dr. Michael Niggemann, the Executive Officer for Human Relations -- Human Resources and Legal Affairs. The other members of the Executive Board are watching the online broadcast and some of them are even present in other parts of this building. There are also members of the Supervisory Board present, namely Ms. Christine Behle, the Vice Chair; Mr. Herbert Hainer, Mr. Ilja Schulz, both are members of the Steering Committee; as well as Mr. Stephan Sturm, the Chair of the Audit Committee. The other members of the Supervisory Board are also watching this AGM through the online broadcast. The notary public, Dr. Kersten Von Schenck, will take today's minutes. He is also present in this room, as you can see. You all know that the COVID-19 crisis is having a massive impact on Lufthansa as a company. The Executive Board and the Supervisory Board have been working flat out for weeks to ensure the survival of our company. We are also looking into ways of restarting flight operations after the corona crisis and of making Lufthansa once again a leading player in global aviation. We have difficult times ahead of us, but we will do everything in our power to reach the goals that we have set ourselves. Those goals are the survival of Lufthansa and restarting the company. But we cannot do this on our own. The impact of the crisis are too massive for that, Mr. Spohr will go into more detail on this, in his intervention, in the speech. The invitation to today's AGM, together with the draft resolutions of the management and all other prescribed notifications have been published on the 9th of April 2020 in the federal gazette which means that this AGM has been convened in due form. However, this AGM is still very different from all the others. There's the virtual format, of course, but also the great insecurity hovering over us about how things will continue. Nevertheless, we are trying to safeguard as much as we can of the usual spirit of our AGMs. This is why we have organized the online broadcast of the entire AGM. And there's also an electronic possibility to take part in the voting procedures and to send in questions and also to voice objections. Today's AGM has -- today's agenda has 9 items. First, let's move on to item #1, the presentation of the adopted annual financial statements, the approved consolidated financial statements, the combined management report for the company and the group, the report of the Supervisory Board and the explanatory report of the Executive Board on the statements pursuant to Sections 289a(1), 315a(1) of the German commercial code, each for the financial year 2019. The Supervisory Board had commissioned PricewaterhouseCoopers as auditors to audit the adopted annual financial statements and the consolidated financial statements as per 31st of December 2019 as well as the early warning system on risks. All audit items have received an unqualified opinion. The early warning system on risks has been deemed appropriate to diagnose risks that would endanger the survival of the company. Now of course, we are trying to do the Audit Committee -- what -- we have to look at the Audit Committee reports in the light of the COVID-19, which was not foreseeable back then. The special combined nonfinancial statement, in line with the corporate social responsibility guidelines were also audited and has also received an unqualified opinion. On the 13th of March 2020, the Audit Committee discussed the audit reports together with the auditors and the CFO. The auditors took part in the meeting of the Supervisory Board on 18th of March 2020, and they reported on their results. The annual financial statements, the approved consolidated financial statements and the special combined nonfinancial statements were examined by the Supervisory Board, and no objections were raised. The annual financial statements and the consolidated financial statements were approved by the Supervisory Board as recommended by the Audit Committee. This means that the annual financial statements of Deutsche Lufthansa AG for 2009 (sic) [ 2019 ] are agreed. There was a proposal made by the Executive Board to suspend dividend payments and to use the net profit for 2019 in the amount of EUR 298 million as a provision. And this proposal was also supported by the Supervisory Board. Of course, the background for this decision was the dramatic effect that the COVID-19 crisis was having on the aviation industry and on our company. As early as March, we had to reduce our flight schedule by 70%. And of course, things went downhill after that as well. Currently, we are only running around 1% of our -- of our schedule compared to the previous year. Now of course, there was -- given this dramatic situation, there was no alternative to the proposal of suspending the payment of dividends. And saying that there's no alternative is not something that I say lightly. I would now like to call on Mr. Spohr to give his report on the financial year 2019.

[Interpreted] Shareholders, I would also like to extend a very warm welcome to you for our very first virtual Annual General Meeting of Deutsche Lufthansa. We are gathered here today at the Lufthansa Aviation Center in Frankfurt. Of course, I would have preferred to welcome you all in person at the Jahrhunderthalle in Frankfurt and to answer your questions in person. However, the COVID-19 crisis still has a firm grip on all of us, and no one can say how much -- how long the situation will last. Now the video clip that we watched at the beginning still shows the world of Lufthansa before the crisis hit. But currently, we are watching as the world is facing the most severe economic crisis since the 1930s. And of course, again, aviation is disproportionately affected. But we decided to open our annual general meeting with this clip anyway because it reflects that there's a fascination with our industry and our company, and it also shows where we want to return one day. It shows the goals we are fighting for tirelessly during these challenging times, namely the future of Lufthansa. Global aviation is currently experiencing its worst crisis in its history. Almost everywhere, there are travel restrictions and entry bans. And as a result, our company, your company, shareholders, is in a state of emergency. And that is not even a fault of its own. After many tough years of modernization, we've recorded the best results in the history of companies -- of our company for 3 years in a row. Now, all of a sudden, all of our efforts are being annihilated by a single global event. No one could ever have foreseen this outcome. We at Lufthansa have always faced challenges, be it natural disaster, epidemics or the consequences of war and terror. Crisis management is one of our bread and butter issues. I would like to send out a very special thank you to our teams at Lufthansa who have again worked professionally over the past few weeks. We were one of the first airlines worldwide to quickly reduce our schedule, while at the same time, maintaining and even increasing our cargo capacities to maintain the infrastructure. Many of us are working as volunteers and are also involved in social activities during this crisis. However, that does not change the fact that none of us have ever experienced a crisis of this magnitude before. We are currently facing the greatest challenge of our recent history. We are fighting for the survival of this company and the future of our roughly 130,000 employees at Lufthansa Group. We are doing everything in our power to keep as many of you onboard. That does not only apply to our employees, but also to our customers and passengers and also to you, the shareholders. Your confidence and loyalty are all the more important to us during this crisis. Ladies and gentlemen, we are well aware that the excellent results of the past financial year will have to be put on the back burner now. But I would still like to give you a brief summary of the key figures. Despite strong headwinds, our adjusted EBIT stood at EUR 2 billion. This is our key performance indicator for our economic success. We increased our revenue to EUR 36.5 billion. That is the highest turnover we ever made in our company, in the history of our company. We invested more than ever before, EUR 3.6 billion. The largest part of this sum went into the modernization of our fleet. And as you are aware, the purchase -- the acquisition of fuel-efficient aircraft is always also an investment into the protection of our environment. At the same time, we managed to bring our unit costs down. We were also very pleased that customers were happy with our services. 145 million passengers flew with our airlines last year. That represents yet another record, about 350,000 passengers chose to fly with our airlines every single day. At the moment, however, we are only flying about 3,000 passengers a day. Now in terms of our flight schedule, our company has gone back in time to where it started in 1955, a decade after the Second World War and following a 10-year ban on flights. For 65 years and through many crises, we built this company on the foundations of our forefathers. We made Lufthansa the #1 in Europe and an airline that has been among the best in the world for many years. It took less than 65 days to take us back to the level of 65 years ago in terms of air traffic volume. That is extremely bitter, devastating and painful. Nevertheless, we are looking to the future with optimism at Lufthansa. The years invested in modernizing our company are now paying off, and we have proved that our business model is sustainable. We have managed our company well. And thanks to our excellent results, your company was standing on solid -- on a solid foundation both financially and structurally when the crisis hit. That is now a great help to us, but we also know that we will not make it alone. We are going to need help. The future of Lufthansa is currently being decided, and the key question is whether we can avoid bankruptcies with the support of the governments of our 4 home countries. We will need to see how quickly we can recover from the crisis so that we can start to grow again independently as soon as possible. So in a nutshell, it is about the future and the survival of Lufthansa Group. We have defined 3 phases for our crisis management in this rescue operation. First, the grounding phase. An aviation term that refers to the current phase of the crisis, in which almost the entire fleet has had to be grounded. Second, the restart phase or ramp-up phase, in which we will slowly start to ramp up operations again. And third, the new normal phase, that is our working title for the time after the crisis is over. Ladies and gentlemen, allow me to briefly report on the current situation. In order to protect our passengers and staff, we took action right at the very outset of the corona crisis. We reduced our flight schedules far more swiftly and decisively than our competitors, also in an attempt to cut costs. Many considered these rigorous measures exaggerated at first. No one had any idea how quickly and dramatically the situation would escalate, and that includes us. Now, of course, the world -- the entire world has become one big crisis area. There's practically no more international travel going on. About 700 aircraft in our roughly 760-aircraft fleet are currently grounded. We have had to cancel 3,000 flights a day. Air Dolomiti, Austrian Airlines and Brussels Airlines already terminated all regular flight operations in March for the time being. Lufthansa CityLine is the only passenger airline still operating at our Munich hub. For now we are currently operating skeleton flight schedule until the end of May, and we are going to have to keep this in place until further notice. The current schedule was essentially dictated by the return of Europeans from abroad. The current passenger figures at Lufthansa are currently at best at 1% of the previous year's levels. In other words, we have had a 99% decline in passenger figures. Currently, there's only high demand for air cargo. In addition to using the entire cargo fleet, we have also operated 70 cargo flights using passenger aircraft. And in order to be able to transport more cargo, we have removed the seats from 4 of our A330 aircrafts so they are now a combination of cargo and passenger aircraft. This situation is less pleasing at other service companies or looking less bright at our other service companies. They have also been hit hard by the crisis. Lufthansa Technik expects its workload to decrease by 60% for 2020. The production of meals at LSG has decreased by 95%. A total of 23 facilities have been shutdown until further notice worldwide. So the interim economic balance is grim. We have practically no earnings anymore. The costs for staff, material, rent or fuel hedging, however, remain in place. After 3 record years, we are currently losing about EUR 1 million of our liquidity reserves per hour in operations alone. Therefore, it has been our top priority since the start of the crisis to reduce costs and to secure liquidity. Currently, the group's liquidity is still above EUR 4 billion, which puts us in a comparatively good position. Now we owe that above all to our successful financing measures, cost reduction and stringent liquidity management. We've had to make tough decisions in order to reduce the loss of our cash in hand. One of them affects you, shareholders. Unfortunately, we will not be able to propose a dividend to the Annual General Meeting for the successful year 2019 that lies behind us. I would like to thank all of those who have already signaled their understanding for this measure to me and my colleagues over the past weeks. Now of course, this measure alone will not be enough. All stakeholders, each and everyone is going to have to make a contribution in this crisis that is threatening the existence. The Supervisory Board, the Executive Board and the senior management of our company have voluntarily agreed to wave part of their basic remuneration apart from the variable remuneration. At the moment, more than 80,000 staff of Lufthansa Group are on a government's wage subsidy scheme with reduced working hours. Now please believe me when I say that this does not only hurt those affected, it also hits me hard and all of us. However, it is an indispensable contribution to securing our liquidity. We are currently topping up the statutory government wage subsidy in Germany up to 90%. However, we will only be able to do so for a short time. And we're already engaged in negotiations with our social partners on how we can manage the situation in the long term. We're also asking a lot of our customers, above all, patience. Most European countries are supporting the temporary voucher solution for canceled tickets. The EU Commission, however, has not yet been able to agree on such a measure. It puts the entire travel industry at risk or it might do so if we are required to immediately reimburse cash in the current phase. In addition to our customers -- customer centers and processes are simply not designed for such a multitude of reimbursements. I would like to, therefore, ask our customers for their understanding. We're also negotiating with aircraft manufacturers with regard to delaying aircraft deliveries because we will not be able to return to our old fleet size for the foreseeable future. We're also negotiating with airports, air traffic controllers and the public sector on a fair distribution of costs, specifically by lowering charges and deferring taxes and social security contributions. However, we also know that all of these contributions combined will not even come close to compensating the lack of income. Our liquidity will continue to fall over the next few weeks significantly and significantly so. At the same time, we're working together with the airports in Germany and the German air traffic control to maintain a critical infrastructure. That is the only way that we can make important contributions to society and maintain the health and safety of the population. That is what is expected of us even if it makes little sense from a commercial point of view. We have always assumed responsibility, and we're also doing it now out of conviction. We are glad to help in the current crisis. We are glad to show how valuable our workers and how important aviation is. Just think of the hundreds of repatriation flights. We have flown almost 100,000 people home, 9 special flights were put on from New Zealand alone. We have flown 3,500 farm workers to Germany with Eurowings and 100 further flights are planned. We're operating cargo flights to supply hospitals and care facilities with medical personal protective equipment, including 150 million protective masks. We have furthermore really used staff with medical training so that they can go and help in the health care system where they are badly needed. We want to provide help and support wherever possible, we want to be active. It is more important than ever to ramp up help alliance. This is more important than ever to stand with the poorest of the poor now facing better misery and despair as a result of corona. Many people no longer have any income at all throughout the world. And how can people abide by hygiene regulations in places where even drinking water is scarce? The coronavirus presents us with entirely new humanitarian challenges. Thank you to our colleagues who are helping, providing support and doing so -- an amazing job during these challenging times. Ladies and gentlemen, the restart, the recovery phase. No one knows as of yet when we will be able to take off again. We expect part of our fleet to spend the summer on the ground. And we hope that in June, we will be able to ramp up. But it's going to take time. In 2023, we expect global demand to be back because it's going to be on a lower level. And this is new. That is what our current planning and strategies are based on. We do not just want to be better than others during the crisis, we want to be better after the crisis as well. We are also working on structural realignment in order to emerge from this crisis stronger. We are making use of the time to position ourselves competitively for the future. We are planning with a significantly smaller Lufthansa Group. We already decided on the first steps in this direction in April. All of the airlines in the Lufthansa Group will be downsized. Older, less environmental-friendly aircraft will be phased out of the fleet earlier than originally planned. A340-600 fleet will be temporarily decommissioned, just as 10 Airbus A380 (sic) [ 6 Airbus A380 ], 5 Boeing 747-400, 10 Airbus A320 will be removed from Eurowings fleet. The ongoing restructuring programs at Austrian and Brussels will be intensified further. Both airlines will also reduce the size of their fleet within this context. Germanwings flight operations will be terminated 2 years earlier than planned. In the future, we will be flying with a maximum of 10 airlines. We will continue to bundle and expand our tourism segment when the restart comes. We were already doing so before the crisis. And there will be a great increase in demand here than for business travel after the crisis. Aircraft out of 4 companies, we will bundle to one touristic-oriented company. We want to reduce the individual cost 2% to 4% per year instead then of 1% to 2%, so much for the structural measures. In order to accomplish our successful restart, we have -- going to win back our customers and build confidence. Hygiene measures and safety precautions surrounding the flight will play a central role here. We have already developed a catalog of measures in order to minimize the risk of infections or the introduction of corona. We would like to protect our passengers and crews as well as possible. Ladies and gentlemen, the level of complexity surrounding all of these measures is extremely high. On the one hand, there is uncertainty as to when operations can be resumed. And at the same time, we have to take into account the corporate law dimensions. We are talking to the German Federal Government and the KFW. In addition, we're also negotiating with the governments of Austria and Belgium for help with Austrian Airlines and Brussels Airlines. In case of SWISS and Edelweiss, we have already received assurances from the Swiss government for a loan that will be guaranteed largely by the Swiss state. The package still has to be approved by the parliament, but that is expected at the beginning of May. At the moment, we are not only discussing the levels of the necessary amounts, but also negotiating the conditions and time lines as to when this help can be made available. We must be competitive also after corona. And we need to be able to invest. Above all, we will continue to need money to modernize our fleets, also in the interest in protecting the environment. That topic is currently overshadowed by others; however, it is not going to stay that way. As the volume of flights increases, the climate discussion will also become very topical. We will only be fit for the future if all these conditions are fulfilled. To sum it up, our future viability equals our competitiveness and our ability to invest. Aid from the state is not an end in itself. We attach it to clear goals and consider ourselves responsible to the taxpayers who make this aid possible. In order to remain competitive, we want to keep the Lufthansa Group and European airline group together, whatever the scenario. That is our overarching goal. If we want to compete globally against 3 major airline groups in the U.S., China and the Gulf region, at the Bosphorus, then we will able to do so only as European airline group. First and foremost, we cannot allow ourselves to become heavily indebted. That would paralyze us for years. We need a plan today for how we can repay the government loans and investments as quickly as possible. Politicians are now called upon to ensure that aid does not lead to an imbalance in international competition, especially when competitors in the U.S. and China are now getting in great shape with state support. It is all the more important now that international competition not be distorted by differing types and scopes of state aid. The experience of recent years have shown that those who are not competitive will not be able to make it in the long run even with state aid. Up until the corona pandemic, we as the Lufthansa Group were competitive and successful. We were hit by this crisis, which is not our fault. Now we need government support. We do not need government management. In the federal government in Germany, nobody wants the state at the helm of Lufthansa. Lufthansa was successfully privatized in 1997. During the last 3 years, we have consistently generated an operating result of over EUR 2 billion. We invested record amounts every year, on average about EUR 3 billion. I became a member of the board 10 years ago, and we couldn't dream of these sums, but we can do it. This is so important to preserve the entrepreneurial freedom of decision and action of the Lufthansa Group. We currently expect that the global demand for air travel will no longer grow as dynamically as it did in the past years. People's travel behavior will change in terms of leisure and business travel. As a result, global air transport will have to restructure itself. We expect a global transformation of air transport and would like to continue playing a leading role with the Lufthansa Group in the future. Lufthansa will be different, and it's going to be smaller after the crisis. We will reduce the size of our fleet by about 100 aircraft. That means we have 10,000 employees too many on board. We will no longer be able to rule out laying off staff for operational reasons, unless we find a way to keep as many colleagues as possible on board using innovative part-time models in our unique brand of Lufthansa solidarities. We feel the will from all sides involved for all -- for Lufthansa to persist in global competitions. We must and will do so. The importance of basic supply of flights is now becoming clear for all to see. Maintaining our European infrastructure is of vital importance. Allow me to share a few personal thoughts at this point. These days, we are time and again hearing how health comes first and rightly so. We were also faced with a painful decision in this respect in the Executive Boards. Ulrik Svensson was, at the beginning of May, advised by his doctors to stop working immediately. It goes without saying that we accepted this decision. For me personally, it is particularly painful to have to do without one of my closest colleagues in recent years. We have redistributed his duties among the remaining members of the Executive Board. Ulrik, I hope you are able to watch today. We wish you all the very best of your health. You've never spared yourself. And you have achieved so much for Lufthansa. the successes of the past few years above all your successes. We all say thank you. Ladies and gentlemen, it has also always been our strategy at Lufthansa to strike a fair balance between our stakeholder interest and partners: between customers, staff and shareholders. This same balance must also be our goal in the crisis. The development of revenue and earnings in the first quarter of 2020 shows how much we now really need these joint solutions. The preliminary figures show a loss of EUR 1.2 billion for January to March, and the second quarter will be even worse. I cannot provide you with an outlook for the full year in the current situation. I can tell you, however, the airlines were the first in the world to be hit by this crisis. They were hit the hardest, and they will be among the last industries to emerge from the crisis. Nevertheless, it remains our aim at Lufthansa to emerge from this crisis stronger. It is my wish and that of our staff that the positive contribution of air transport to globalization within the framework of the corona crisis is not forgotten. Connecting people and cultures across borders. This is our mission to society. And it's with the greatest conviction that we say Yes to Europe, Yes to the World. Say Yes to Europe, say Yes to the World has always been more than just a brand campaign to us. Both these statements stand for our attitude. We should not lose the international zeitgeist and our openness to the world as a result of this crisis. It's about more than economic success here. A couple of weeks ago, a customer wrote to me: "To me, freedom is not when the home improvement stores open again in Bavaria, but when you are 10,000 kilometers away from Munich airport and you hear: 'Welcome aboard of German Lufthansa.'" I promise you that we will be connecting people, cultures and continents again as soon as possible. We will stay on course and do everything to ensure that our Lufthansa takes to the skies again. We were successful at restarting 65 years ago, and we will be successful again. We are fighting for our company, our staff, our customers and for you, dear shareholders, because we are convinced that we are contributing to something that is truly important. Thank you for your support. Stay with us. And above all, stay healthy.

[Interpreted] Thank you very much, Mr. Spohr, for your speech. Dear shareholders, now I'd like to talk about the action of the Supervisory Board in 2019 financial year and in during the current crisis, how are we working. In 2019, the Supervisory Board has very well and efficiently worked with the Board. We have had 4 meetings in division. Information about the individual attendance, you can see on our home page. Key and center of our meetings were the economic development of Lufthansa and associate companies, and of course, large investment and further projects. In March, the Supervisory Board agreed to up to 40 long-haul aircraft of different types by the companies of Lufthansa Group. In December, the Supervisory Board agreed to sell the European operations of LSG to Gategroup. Furthermore, the Supervisory Board has decided upon a new structure and the distribution of business. There are results and customers and corporate responsibilities, business units as well as IT, digital and internal innovation. Those are very important topics for the future of Lufthansa. And we have the business units established now in the Executive Board. We discontinued Eurowings. In the future, in coordination with other passenger airlines of the group, this is going to be one business unit. Overall, the new structure points the Executive Board in a more functional and efficient manner and is oriented on the value chain as an airline. For the new entity of customer and corporate responsibility, the Board -- the Supervisory Board invited Christina Foerster as of the 1st of January 2020 for a term of 3 years. This is what we do for the first term. We are convinced that Ms. Foerster has the personality and the experience, especially as a CEO and CCO before of Brussels Airlines, and she'll be able to shape this new entity. The Supervisory Board also invited Mr. Michael Niggemann as of the 1st January of 2020, as well for a term of 3 years. Before, he was the Director, CFO of SWISS, and before, the Director of Legal Affairs and Compliance. He follows in the footsteps of Bettina Volkens who left the company on 21st of December 2019 in mutual agreement. Within the 6 years of her work on the Board, Ms. Volkens has initiated very important steps for a cultural change, which was crucial for the success of Lufthansa Group. This Supervisory Board thanks Ms. Volkens for the successes achieved and her work -- determined work until the very last hour. In December, we have routinely reviewed the efficiency and we have formulated with the Supervisory Board the compliance declaration with the Corporate Governance Codes. We've also reviewed the remuneration system. As of the 1st of January 2020, there will be some modifications. This is to take into account the new legal framework of the second shareholder directive and the new shape of the German Corporate Governance Code. At the same time, we took into account the ideas and demands of few shareholders from the last AGM. In this context, as of 1st of January 2020, we changed the multi-annual remuneration from performance cash plan to a performance share plan. In the future, in addition to the relative development of the share, the absolute share development is also taken into consideration, into account. It is a leading based on the creation of value. So we have a 1-year variable remuneration on the basis of the adjusted ROCE and adjusted EBIT margin. This is based on the key KPIs of the group, especially the appropriation of capital. In the Report of Remuneration, we also inform for the financial year expressed above the goals and how they were met. For the obligation to hold shares, we agreed upon a further extension of this obligation. For all board members, we have a clawback regulation. The Supervisory Board is allowed to keep or to remand to recuperate, recover remuneration. As seen in the past, we have a limit to the remuneration of board members. This maximum remuneration was enlarged in order to stakeholder rights directive, and now all components of the remuneration are able or will be able to be covered, including cheaper flights. As of the 1st of January 2020, there is a remuneration system in force. I'd like to describe it briefly. In current treaties and contracts, this was agreed upon. And we'll see another picture briefly. There was no adaptations to the remuneration in its dimension. It is to be a contribution to further the strategy of the group. It's to safeguard a sustainable and long-term development because we believe in the success of post-corona Lufthansa. Remuneration of the Board is based on stable and flexible components depending or not on the success based on the German Stock Corporation Act. The flexible remuneration is very sustainable. 2/3 of the flexible remuneration are of this nature, 1/3 of the bonus is annually based. As in the past, this flexible component is based on financial and nonfinancial success targets. Especially, the ESG criteria come into play here: environment, social, governance. This is what ESG stands for. So employees, customers, compliance, reputation, quality and environment as well. In cases like the corona crisis, the remuneration system provides for the possibility to take into account performance and crisis management. The Supervisory Board will decide upon this in due course. All details are on the agenda in Point 6 about the activity of the Supervisory Board in the current financial year. This is an absolutely extraordinary year. And this is why I'd like to say a few words about this. The Executive Board has very quickly reacted to the crisis and adapted the flight schedule. There were comprehensive measures taken in order to lower cost and investments. The Supervisory Board is very much associated to these decisions and wholeheartedly supports those measures. As Chairman of the Supervisory Board, I am in daily contact with the CEO and members of the board as well. We exchange our views about topics. On March 18, the Supervisory Board decided that the Steering Committee can decide on urgent matters as far as legally viable and there are no other committees dealing with these topics. If members of the Steering Committee are unavailable, there are wise members for this case. The Steering Committee comes together weekly in a telephone conference and makes sure that between meetings, crisis management is coordinated. There are written reports on a regular basis as well as video and telephone conferences, including the entire Supervisory Board. The last one took place yesterday. As of the 6th of April, Mr. Ulrik Svensson discontinued his term as CFO for health reasons. Mr. Spohr just mentioned this. Mr. Svensson has been working in the last 3 years, unfortunately he wasn't able to continue longer. His work was excellent in order to internationalize the culture of work at Lufthansa. He's made important decisions and set the tips for important developments. The Supervisory Board and I personally would like to thank Mr. Svensson. We deeply regret that he had to discontinue his work. As a person and as a professional, he was an amazing member. And we wish him all the best from the bottom of our hearts. On the 8th of April, we had an extraordinary reunion. We talked about the successor of Mr. Svensson. We decided to keep the structure as is, 6 Board members, and we temporarily distributed his function as CFO. I'd like to come now to the proposed members. With the end of this AGM, the term of Mr. Stephan Sturm will terminate as well. Herbert Hainer, Martina Merz, Michael Nilles and Matthias Wissmann have discontinued their terms with the end of this AGM as well because they have other business to attend to. We'd like to thank very much all leaving members of the Supervisory Board for their work, for their commitment to Lufthansa, for their actions taken, and you certainly will remain loyal to Lufthansa. The Nominating Committee proposed, and we follow this proposal to vote Mr. Sturm for another 5 years into the Supervisory Board. Pursuant to the proposals, as can be seen on Agenda 5, we propose Erich Clementi, Dr. Thomas Enders, Harald Kruger and Astrid Stange to be members of the Supervisory Board for 5 years. All 4 new candidates have comprehensive knowledge and experience in the topics relevant to us. Therefore, they are perfectly compliant with the profile. The details were accessible in the information published in their CV's. I'd like to give the opportunity to the candidates to talk to you in person. Mr. Stephan Sturm first. Mr. Sturm, please?

[Interpreted] Thank you, Dr. Kley. Shareholders, my name is Stephan Sturm. I'm the CEO of Fresenius Group. 5 years ago, I was nominated for a position on the Supervisory Board, you gave me your trust, and I would like to thank you for this. Today, I would like to apply again for your trust and for this position. For the past 5 years, I acted independently to represent your interests on the Supervisory Board based on my experience as a Chief Executive Officer, but also as a Chief Financial Officer, a position that I also held. I was also part of the Audit Committee. And I'm now the Chair of the Audit Committee on the Supervisory Board. Lufthansa is a wonderful company and I firmly believe that it still has a successful future ahead of it, which may look a little bit different from what we thought only a short while ago. I would like to keep working for this company to contribute my expertise and my advice to the Supervisory Board and the Executive Board about the way forward. In the current crisis, I would like to play my part to achieve a new normal after the ramp-up phase. And I would feel honored. I would be honored if you gave me your trust again. Thank you very much.

[Interpreted] Thank you, Mr. Sturm. Prior to today's AGM, we prerecorded statements of the other 4 candidates who would also like to speak to you. And I would like to ask for these statements to be played now.

[Interpreted] Shareholders, my name is Erich Clementi. I was born in South Tyrol and I live in the U.S.A. today. And I am active as a consultant and on the Supervisory Board of various companies. From 2010, I worked at IBM, and I represented the company divisions in North America and Europe. My chief aim was to open up new markets and to optimize processes and business models, which is also relevant to the aviation industry, which is relevant to its success. I have known Lufthansa for over 30 years from the point of view of a customer and I am looking forward to the challenges ahead of Lufthansa and also to contribute my expertise.

[Interpreted] Hello, shareholders from Munich. My name is Thomas Enders. I'm 64 years old. And before I retired, I have worked -- I worked for more than 30 years in the aviation and space industry, beginning with [ Bloom ] and other companies. And for 14 years, I was the CEO of Airbus. I held various managerial positions there. Of course, I got to know Lufthansa very well during this time and I also appreciate it as a partner. I would be deeply honored and pleased to be able to contribute to the success of this wonderful company and to support the management led by Carsten Spohr during the further development of the company.

[Interpreted] Shareholders, I am pleased and honored to apply for the -- for a position on the Executive Board. The current situation is challenging for all sectors. But we should, nevertheless, look ahead. Now allow me to briefly introduce myself. I am a mechanical engineer. I have worked for BMW for 28 years. I am passionate about mobility and all its aspects. 2008, I was appointed a member of the Supervisory Board where I was responsible for human resources, distribution and other units. For the past 4 years, I was a member of the management team of BMW. Now why should you give me your vote? I have a lot of experience in terms of strategic management of the stock market-listed companies. Now there are lots of things that BMW and Lufthansa have in common, namely the focus on customers, our innovation, sustainable action and value-based management culture. I would like to contribute my part. I would like to pay my role to increase the value to create and add new value to Lufthansa. I would be pleased if I would gain your trust.

[Interpreted] Greetings to all of you from Munich. Ladies and gentlemen, I'm pleased that I have the opportunity to introduce myself to you today. My name is Astrid Stange, I'm CEO of AXA, based in France and 16 other countries. I'm responsible for developing our business which has 108 million customers in more than 60 countries. And to unify to formulate a corporate strategy, new technology should allow us to communicate efficiently and act efficiently together. Lufthansa relies on IT. It has also grown by consolidating several affiliates. And although these companies differ in certain aspects, I can contribute my experience, especially in the IT sector to change the corporate culture of Lufthansa and to add to its value. Now I expect challenges as a member of the Supervisory Board. The current crisis has led to a sea change in customers' behavior in a very short time and also prove the worth of IT-based new business models. The Executive Board and Supervisory Board of Lufthansa will work together on developing this strategy. Thank you very much for your attention.

[Interpreted] Thank you to the candidates. Apart from Mr. Sturm, as I said, we prerecorded the statements. Now I would like to ask Mr. Niggemann to present the authorized -- the increase in capital from the authorized capital in the last financial year.

[Interpreted] Ladies and gentlemen, before we move on to answering the questions of shareholders, I'm obliged to give the following statement according to the German Stock Corporation Act. Also in the year 2019, the authorized Capital B designed to issue new shares to employees of Deutsche Lufthansa AG and its affiliates was partially utilized. The share capital was raised -- was increased by a nominal value of EUR 7,637,831.68 by issuing 2,983,528 new shares with -- each with a pro rata share and the share capital of EUR 2.56 per share and an issuing price of EUR 14.18 per share. The Executive Board based the issuing price on the stock market price of Lufthansa shares. Compared to the stock market price, the fixed issuance price did not include any premium or discount. The new shares were issued exclusively to employees of Lufthansa and its affiliates as part of the employees share ownership scheme. The subscription rights was already excluded when the authorized Capital B was created by the AGM -- was approved by the AGM. The exclusion of subscription rights was necessary to allow employees of Deutsche Lufthansa AG and its affiliates as part of a multi-annual investment model to allow them a greater involvement or investment in the share capital of the company and to bring the interest of the company and the employees in line. Considering that this same price was based on the stock market price and the capital increase represented only 0.6% of the share capital at the time, the dilution effects resulting from the exclusion of the subscription rights can be considered insignificant. Now for further details on the utilization of the authorized Capital B, I would like to refer you to the explanation Note 31 in the annex to the financial statements on Page 176 of the management report.

[Interpreted] Thank you, Mr. Niggemann. Now before we move on to the question-and-answer session, let me now state today's presence. The share capital has remained unchanged since the AGM has been convened. And today, 98,287,314 no par value shares are present, which represents 20.55% of the share capital. In addition, we have received online absentee votes for 60,403,000 no par value shares, which means that we have a total of 158,690,314 no par registered value shares present, which represents 300 -- 33.19% of the share capital. The attendance information is available on the website. For everybody who is watching us online, I would like to point out that the publicly available part of today's AGM has now ended. Thank you for your interest. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]