BERLIN Lufthansa (LHAG.DE) named Thorsten Dirks, a telecoms exec used to cut-throat price competition, to its management board on Wednesday to lead the expansion of budget unit Eurowings, which is rapidly building its presence in Europe.
Eurowings is Lufthansa's answer to regain market share lost to rivals such as Ryanair (RYA.I) and easyJet (EZJ.L), which have shaken up the airlines industry with low fares, while keeping tight cost control thanks to harmonized fleets and flexible staff contracts.
Lufthansa wants Eurowings to become Europe's third largest point-to-point carrier and has planned deals to lease up to 40 planes and their crew from ailing rival Air Berlin and take over Brussels Airlines.
Dirks, born in 1963, began his career with the German Air Force but has spent much of his career in the telecoms industry.
From 2007, he headed budget mobile carrier E-Plus, which disrupted established German rivals by luring customers with low-cost pre-paid contracts.
He was instrumental in its acquisition by Telefonica SA (TEF.MC) in 2014 and was named by the Spanish group to lead its German arm, Telefonica Deutschland, following the 8.6 billion euro ($9.2 billion) takeover of E-Plus.
"Dirks has shown that he achieves economic success with firm cost control," Lufthansa CEO Carsten Spohr said in a statement, highlighting his ability to strike partner deals.
Dirks is also head of telecommunications and IT industry association Bitkom, and Lufthansa said it hoped to use Dirks' digital expertise to help drive passenger growth at Eurowings.
Airlines are increasingly turning to smart analysis of customer data and spending habits to tailor tickets and encourage passengers to spend on repeat trips or ancillaries such as food.
Dirks, whose contract with Lufthansa runs for three years from May 1, 2017, unexpectedly announced plans to leave Telefonica Deutschland late last month.
He replaces long-time Lufthansa manager Karl Ulrich Garnadt, who is retiring because he is turning 60 in January.
(Reporting by Victoria Bryan and Harro ten Wolde; Editing by Maria Sheahan)