German flag carrier Lufthansa has announced that its new low-cost subdivision will be branded under the Germanwings name.

With effect from January 1, 2013, point-to-point routes between Germany and other European cities will be operated under the Germanwings brand.  Currently, Germanwings offers all-economy seating and additional fees apply for luggage and meals.

In a statement, Lufthansa Chief Executive Christoph Franz said that flights to and from Lufthansa’s hubs in Frankfurt and Munich, which connect with long-haul services, will continue to be operated by Lufthansa, but all other European routes will be operated by Germanwings.

Lufthansa has been hard hit by competition from budget airlines like EasyJet and RyanAir, and these changes are designed to make the airline more profitable.

Germanwings has announced it will launch a new route between Manchester, UK, and Stuttgart, Germany, in July 2012. The budget carrier will fly to Stuttgart five times a week from Manchester, every day except Wednesday and Saturday, with flights taking less than two hours.

The airline will also increase the number of flights between Stuttgart and London Heathrow Airport starting in February 2012 and the new route will start in summer 2012. Germanwings said the changes have been made possible by working closely with its parent company Lufthansa. The new connection will allow passengers to connect to a number of other destinations via the Germanwings hub in Stuttgart.