Lufthansa is facing a serious leadership crisis after former CEO Wolfgang Mayrhuber declared he is no longer a candidate for the chairman position at Europe’s largest airline.

Lufthansa confirmed Mayrhuber’s decision in a regulatory filing on the morning of May 6, and said it would come up with a new nominee for the chairman’s role later in the day.

Mayrhuber was expected to be elected to the board of directors at the airline’s annual general assembly in Cologne on May 7. The board would have subsequently made him the new chairman following Juergen Weber, who has been leading the board since 2003.

Mayrhuber’s decision follows strong criticism of his candidacy by institutional investors, including Union Investment and Templeton. The investor groups are concerned that Mayrhuber’s cooling off period following his departure as CEO was not long enough, and that he held too many other board positions to be able to focus on Lufthansa. Mayrhuber was Lufthansa CEO from 2003 to 2010.

He has faced criticism not only from investors, but also from parts of Lufthansa’s management. They fault Mayrhuber for acquiring Austrian Airlines and Brussels Airlines, two carriers still in restructuring mode, and they also say he did not do enough to counter low-cost carrier competition.

His successor as CEO, Christoph Franz, has made it a priority to turn around the loss-making European airline, outsource some short-haul flying to Germanwings and limit losses at the affiliate airlines.

Lufthansa said the board will work on an alternative proposal for the chairman position later today and publish its position straight away. Company sources say Lufthansa’s outgoing chairman, Juergen Weber, is unlikely to be available for another term.