BERLIN -- German airline group Deutsche Lufthansa AG says it will combine many of its European short-haul flights with its Germanwings budget carrier as part of a wider cost-reduction effort.
The company says the new carrier will have about 90 planes and start operating in January, flying some 18 million passengers annually.
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Lufthansa said in a statement late Wednesday that the new division, whose name has yet to be decided, will take over all domestic and European short-haul flights outside the airline's main hubs Frankfurt and Munich.
Lufthansa CEO Christoph Franz said the restructuring will help achieve "significant efficiency gains."
The Cologne-based group, which includes Swiss and Austrian Airlines, is currently implementing an ambitious cost-cutting program as it struggles to compete with European low-cost carriers such as Easyjet or Ryanair.