Lufthansa is reviewing its partner regional carriers as it confirms plans for a new low-fare carrier to be called Germanwings. The German flag carrier says it has launched a full review of its business model. Wholly and partly owned subsidiaries and other airlines will operate thinner routes under the Lufthansa brand.

The review will probably also decide whether to exercise the right to double its stake in regional airline Eurowings to 49.8%. Under the new strategy, Lufthansa will allow Eurowings to use the  Germanwings brand, which the carrier acquired after the collapse of a competitor, for its domestic low-cost operation due to be launched in late October. Germanwings will start with Eurowings' charter fleet of five Airbus A319 and may acquire more next year to add to its network of 15 European routes from its Cologne Bonn base. Brussels-based budget carrier Virgin Express is also due to start flights out  of Cologne Bonn this autumn.

Lufthansa will soon decide on a replacement for its 60-aircraft order for Fairchild Dornier 728 regional jets, which it cancelled as Fairchild Dornier slipped further into bankruptcy. Eurowings is likely to take on the aircraft, originally intended for Lufthansa's CityLine subsidiary, and perhaps CityLine's 18 BAe Avro RJ85s.

The group's reorganisation is likely to centre on gaining operational efficiencies from the various airlines in Team Lufthansa - Augsburg Airways, Cimber Air, Cirrus Airlines, CityLine, Contact Air and Eurowings in Germany, and Italy's Air Dolomiti, in which Lufthansa holds 20.7%.

Source: Flight International