Lufthansa eyes Eurowings as platform for consolidation

Lufthansa logo is pictured during a pilots' strike of German flagship carrier Lufthansa at Munich's airport March 18, 2015. REUTERS/Michaela Rehle

FRANKFURT (Reuters) - (This version of the story was refiled to correct spelling of Dolomiti in paragraph 1)

Lufthansa LHAG.DE said it wants to use its expanded low-cost brand Eurowings as a platform for European consolidation, and it could potentially take in other Lufthansa units or part-owned stakes such as Brussels Airlines and Air Dolomiti.

The first plane with the new Eurowings branding, aimed at price-sensitive leisure tourists, will take off from Cologne to the Dominican Republic in November. From Jan. 1, it will replace the Germanwings brand.

Lufthansa Chief Executive Carsten Spohr said Europe’s airlines needed to consolidate. Lufthansa wants to be a part of that process and sees Eurowings as the ideal platform, he said.

Eurowings is Lufthansa's answer to low-cost carriers such as Ryanair RYA.I and easyJet EZJ.L. It will have an Austrian operating licence and is not bound by the group collective labour agreements at its Lufthansa and Germanwings brands.

Lufthansa owns a 45 percent stake in Brussels Airlines and had agreed that this would only be a first step towards a full takeover. Spohr said however it was not yet clear if and when a complete takeover would happen.

The airline also added it will keep its investment budget to 2.5 billion euros ($2.8 billion) a year until 2020.

Separately, Lufthansa and cabin crew union UFO are holding talks on whether to resume negotiations over pay and pensions in a bid to stave off what could be imminent strikes over the busy summer holiday season.

Reporting by Victoria Bryan and Peter Maushagen; Editing by Arno Schuetze and David Evans