FRANKFURT, GERMANY — The German civil aviation giant Lufthansa Group is making steady progress towards the launch of its new short and medium-haul airline in Europe, which will operate under the name Lufthansa City Airlines.

The company has already begun recruiting staff for ground operations. However, the exact launch date is contingent upon several factors, including securing an agreement with the pilot union Cockpit.

For more than a year now, Lufthansa has been exploring the idea of establishing a new regional subsidiary. At the annual results press conference held last year, CEO Carsten Spohr announced that the group had been contemplating the launch of a sister airline to Lufthansa CityLine, the existing regional carrier. If all goes as planned, the new airline will commence operations this summer.

With the launch of a new regional subsidiary, Lufthansa aims to expand its share in the regional budget travel market.

Another key motivation behind the establishment of a new carrier was to provide employment opportunities for around 250 captains who had been previously employed by Germanwings, which went bankrupt and ceased operations in April 2020.

However, Lufthansa's intention to offer employment to the former Germanwings pilots on contracts with lower wage rates compared to those offered by other airlines in the group faced strong opposition from the German pilot union.

The union and Lufthansa Group had been engaged in intense talks about an overall review of the pilot wage structure and the scale of mainline operations, which culminated in strikes last year, significantly impacting Lufthansa's operations.