Lufthansa reviewing future of Germanwings

FRANKFURT (Reuters) - Lufthansa <LHAG.DE> is reviewing options for its Germanwings business after ruling out a union proposal to consider shortened work hours, also known as Kurzarbeit, as a stop-gap solution for helping the low-cost unit conserve cash.

"There is no agreement on Kurzarbeit, the management board is reviewing options," a Lufthansa spokesman said in response to a question about whether Germanwings was slated for closure or whether shortened work hours would be implemented.

Kurzarbeit is a policy tool in Germany which allows companies to slash wage bills by tapping an unemployment fund overseen by Germany's Federal Employment Office. Once a company agrees to it, it cannot implement forced layoffs on those employees slated for shorter work hours.

Vereinigung Cockpit, and UFO, trade unions representing pilots and cabin crew had negotiated a proposal to put 1,400 Germanwings staff on shortened work hours, which Lufthansa then declined to implement.

"The future of Germanwings is increasingly called into question," Lufthansa added.

(Reporting by Ilona Wissenbach; Reporting by Edward Taylor;Editing by Elaine Hardcastle)