Lufthansa (LH, Frankfurt International) allegedly sought to acquire Hungarian LCC, Wizz Air (W6, Budapest), while under the management of previous CEO Christoph Franz Germany's Wirtschaftswoche has reported.

Sources who spoke to the business magazine on condition of anonymity said the carrier had negotiated "intensively" with Wizz Air's owners, which include Phoenix-based private-equity firm, Indigo Partners LLC, concerning a possible takeover. While no exact reason for the collapse of talks was given, it is believed the overall cost of such an acquisition would have proven prohibitive.

Since Franz's departure, the new Carsten Spohr administration has instead chosen to redevelop its germanwings (4U, Cologne/Bonn) and Eurowings (EW, Düsseldorf) subsidiaries as the carrier's response to Ryanair (FR, Dublin International), easyJet (London Luton), Vueling Airlines (VY, Barcelona El Prat), and Wizz Air's dominance in the European market.

Lufthansa is not alone in its budget carrier plans. Rival Air France-KLM Royal Dutch Airlines (KL, Amsterdam Schiphol) has also chosen to reposition its Transavia Airlines (HV, Amsterdam Schiphol) and Transavia France (TO, Paris Orly) brands into regionally-based European budget carriers. The plan, however, has been met with significant resistance from Air France's pilots who recently ended a 13-day strike which is estimated to have cost the Franco-Dutch carrier at least EUR200million (USD259.7million) in lost revenue.

Ryanair CEO Michael O'Leary has ridiculed both Air France and Lufthansa's move claiming labour's short-sightedness and intransigence would likely lead to significant longterm hinderances for each carrier's budget experiment.

"There is also Lufthansa that has some bizarre plan about establishing a new low-fare airline. Unfortunately [Lufthansa] started with a high-fare airline called Germanwings and they’ll need to do a lot more than call it that and paint it yellow to make it a low-cost carrier," he told the Buying Business Travel magazine. “The problem for legacy carriers is the more they are dealing with legacy issues, such as unions who don’t see the way forward, the harder it will be to set up a subsidiary and call it a low-cost airline. This will only help us grow in Europe."

Instead, O'Leary said he foresees a future in which Europe's established budget carriers act as feeders to Europe's legacy carriers for long haul operations.

"We could be doing contract flying for high-fare carriers and feeding high-fare carrier hubs, but I would see that operating on the basis that the high-fare, long-haul carrier would simply want access to our low-cost seats," he said. "Easyjet in London Gatwick could be feeding British Airways (BA, London Heathrow), Ryanair could be feeding Lufthansa or Air France. It's not something that I'd see them looking at in the short-term, but I think it's an inevitability over the medium term."

Last year, Alitalia (AZA, Rome Fiumicino) famously rejected Ryanair's offer to provide it with domestic feeder traffic via its Rome Fiumicino hub claiming the ailing Italian carrier's service to be "more diverse and valuable for the customer."