The German airline Lufthansa managed to avoid a damaging pilots' strike last month. But the company still faces a challenging future. Plummeting profits and crucial strategic errors have plunged the airline into a deep crisis.

Should the German national airline Lufthansa end up earning millions more in profits this year than expected, it will be thanks in part to one woman: the Frankfurt labor court judge Silke Kohlschitter, 43. On Monday of last week, with the pilots' organization Cockpit already 18 hours into a planned four-day strike, the determined judge had a surprise in store. With charm and skillful diplomacy, she was able to bring the quarreling representatives from the union and from management back to the negotiating table.

The crux of the matter - whether and to what extent German working conditions should apply to domestic and foreign subsidiaries - remains unresolved for the time being. Instead, the strike was lifted and, until March 8, formal negotiations will only address salary increases and improved working hours and resting periods for the airline's roughly 4,500 pilots in Germany.

Kohlschitter's decision could have provided cause to rejoice for Lufthansa CEO Wolfgang Mayrhuber and Deputy CEO Christoph Franz. They claim the abrupt end of the strike meant the company was able to save more than €100 million ($74 million) in lost revenues.

But celebration is far from the minds of the company's two top executives. They know full well that the conflict with pilots over pay and hours is the least of their problems.

For decades, the airline was considered one of Germany's most effectively managed companies. In surveys of university graduates, Lufthansa was consistently placed at the top of the list of preferred future employers.