“Lufthansa Group’s newly established City Airlines will start flight operations in the summer of 2024,” it said in a statement, adding that it had received regulatory approval this June to launch.

City Airlines will serve the Munich and Frankfurt hubs and thus also offer feeder flights for Lufthansa’s long-haul operations, likely from July 2024.

READ ALSO: Germany’s Lufthansa to hire 20,000 employees as recovery gathers pace

The segment had until now been served by Lufthansa’s CityLine, a unit that had long been criticised by management as too costly. The two subsidiaries will continue to operate in parallel, the company said.

Lufthansa said it would begin recruiting pilots and cabin crew staff next month, with CityLine staff explicitly invited to apply.

“Talks with the social partners to agree on conditions for competitive and secure jobs have already begun,” it said.

Media reports said former staff of low-cost carrier Germanwings who were laid off in 2020 could also represent a significant pool of applicants.

“With City Airlines, we want to create prospects for the coming decades and secure sustainable jobs in Germany,” said Jens Fehlinger, managing director of City Airlines.

Labour representatives have accused Lufthansa of manoeuvring to slash personnel costs, with pilots union VC in August saying airlines were “always creating new operating subsidiaries to circumvent or reduce salary conditions”.

The German flag carrier was hit by pilot and ground staff walkouts in 2022 that crippled operations.

It agreed in August to give its pilots pay rises totalling 18 percent in the coming years to bring “stability” after strikes over surging inflation.

The City Airlines announcement comes with the airline rebounding strongly from a severe downturn during the coronavirus pandemic, as demand for air travel booms.