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Air Berlin confirms Lufthansa Group leasing plans; job cuts

This has resulted in a curious co-dependence to keep low-priced carriers (LCCs) at bay: In 2015 Ryanair and Easyjet accounted for just eight per cent of the German market, but within Europe as a whole their share is closer to a third.

Airberlin will box off its leisure operations in a separate unit while Lufthansa Group, keen to grow its Eurowings low-priced subsidiary, will use the new narrow-bodies to expand in Europe.

The second largest airline in Germany carried more than 30.2 million passengers in 2015. airberlin offers a global route network through its strategic partnership with Etihad Airways, which has a 29.21 per cent share in airberlin, and through membership of the oneworld airline alliance. topbonus, the frequent flyer programme of airberlin, is one of the leading programmes in Europe with more than 4 million members.

Germany's biggest airline announced another boost for Eurowings with its exercising of an option to acquire the 55 percent of Brussels Airlines NV it doesn't yet own.

Quoted by Reuters, aviation consultant John Strickland said "It is far from clear that this expansion will help Lufthansa to secure greater profitability".

Lufthansa shares were down 2.99 percent at 9.75 euros 1229 GMT, having touched 9.725, its lowest level since September 2012.

The downsizing will bring expenses of less than 100 million euros and should allow the company to break even in 2018, Pichler said, adding that he feels "obliged" to stay at the airline during the process.

The Lufthansa Group will lease up to 40 Airbus A320 aircraft from competitor Air Berlin beginning next summer.

Shares in the loss-making airline, which is 29 percent owned by gulf carrier Etihad Airways, were worth nearly 20 euros apiece back in 2007 but now trade for under 1 euro.

"We are implementing a size and structure for the business that is fit for objective". Lufthansa, with a market value of 4.56 billion euros, is worth more than 50 times as much as its smaller competitor.

Eurowings CEO Karl Ulrich Garnadt is due to hold a press conference at 1000 GMT on Thursday.

RBC analyst Damian Brewer said he was "perplexed" by the wet lease deal, noting Lufthansa could instead lease planes on the open market and crew them with new staff at market rates. Lufthansa would ensure the terms fitted its requirements for Eurowings, where it aims for a cost base similar to that of easyJet, he said.

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Air Berlin confirms Lufthansa Group leasing plans; job cuts