Air Transport

German flag-carrier Lufthansa is to acquire the budget airline Germanwings from its affiliated regional Eurowings operation.

Terms of the agreement have not been disclosed.

Lufthansa describes the decision as an "organisational matter", pointing out that it will enable management to "better steer" the regional operation in its own market, and similarly for the low-fare division.

The new arrangement will come into effect from 1 January. Germanwings will be taken under an umbrella company called Lufthansa Commercial Holding.

Lufthansa is in the process of acquiring majority ownership of Dortmund-based Eurowings, although it already has management control of the carrier.

Eurowings, which developed Germanwings from its charter division in 2002, says that, with the sale, there are "no immediate changes" in the airlines' operational activities.

"After a successful start-up phase, the building work on the low-cost airline is completed," says Eurowings chief executive Friedrich-Wilhelm Weitholz.

"Eurowings can now focus increasingly on its core business in the regional segment."

Lufthansa has already agreed to acquire several Germanwings Airbus aircraft which are to be used for its new Milan-based operation Lufthansa Italia. Germanwings' fleet, as a result, has been reduced to 25 A319s.