News Summary: Lufthansa forms new budget carrier

TIE-UP: Deutsche Lufthansa AG is combining many of its European short-haul flights with its Germanwings budget carrier as part of a wider cost-reduction effort.

LOGISTICS: The new carrier will have about 90 planes and start operating in January, flying some 18 million passengers annually. 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.

COST CUTS: The German airline 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.