Lufthansa 'on track' for launch of regional City Airlines -memo

FILE PHOTO: A Lufthansa's aircraft is seen on the tarmac at the Munich International Airport

BERLIN (Reuters) - Lufthansa is pushing ahead with the planned launch of a feeder airline connecting smaller regions with larger hubs, the managing director of the new business said in an internal memo to employees seen by Reuters on Tuesday.

The basic framework of City Airlines, founded last year, has been in place with an operating licence since June, Marco Zenger said in the document.

"We remain on track and on the path towards the operative start of City Airlines," he wrote.

Staff recruitment is planned for the end of the year, and Lufthansa is already in talks or pursuing talks with unions representing various groups in the air travel sector, according to the memo.

A spokesperson for the German flagship carrier declined to comment on a timeline for the launch, details of which were first reported on the industry news website Aerotelegraph.

With the new airline, Lufthansa is looking to reduce the cost of its existing feeder flight services connecting long-haul services from its Munich and Frankfurt hubs.

The memo said that Lufthansa wants to negotiate employee transfers from its current Cityline business to the new City Airlines.

Unions accuse Lufthansa of seeking poorer working conditions for employees. Meanwhile, many investors have criticised the group's high personnel costs.

(Reporting by Ilona Wissenbach, Writing by Rachel More, Editing by Miranda Murray)