The grouping of Lufthansa's low-cost projects under the loose 'Wings' name stems from the long established Germanwings and from another Lufthansa group company Eurowings. Key to the 'Wings' concept and to Lufthansa's awakening to its potential is the opportunity to establish new operations with little or none of the legacy issues that have bloated the cost base in the group's core activities. Eurowings has a separate pilot contract to that of the rest of the group, giving lower costs and greater flexibility.
For many years a supplier of regional aircraft capacity to the Lufthansa brand, Eurowings is now becoming a wet lease supplier to Germanwings. It will also spread the group's short-haul low-cost operations into its two other 'home countries', Switzerland and Austria.
Having a platform that avoids the group's legacy labour contracts, and which Lufthansa can expand, not only gives it a lower cost vehicle for growth, but also allows it to put pressure on unions representing its mainline employees to recognise the need for savings.
See related report: Lufthansa's new long-haul low-cost plans show new CEO Carsten Spohr's eagerness to move forward
It seems that Lufthansa was growing increasingly frustrated by its inability to move its cost base low enough to compete in this segment, but had become emboldened by its more aggressive stance towards short-haul point to point. A further catalyst may have been new group CEO Carsten Spohr, who was appointed on 1-May-2014 and who has brought a new sense of urgency to Lufthansa.