Lufthansa has been feeling the pain of gulf carriers, although their frequencies to Germany has been curtailed. Now, according to an article on Bloomberg, the airline is considering launching a separate low-cost unit to handle Asian traffic. You can read more about this from the Bloomberg’s article here.
Lufthansa recently farmed out all of its short-haul flying not touching Munich or Frankfurt to Germanwings unit that is not part of Star Alliance. This was done trying to cut costs of its European flying.
It is interesting to see if something is going to come out of this plan. I think that it would be wiser for Lufthansa trying to match the service level of these gulf carriers that its trying to battle with. Eventually, the flying public makes the decision based on the price, frequencies and service provided.