* Lufthansa hires Telefonica Deutschland CEO Thorsten Dirks
* Dirks to oversee budget unit Eurowings from May 1
* Dirks disrupted mobile telecoms market as head of E-Plus
* Lufthansa shares up 1.6 pct, slightly outperform DAX (Adds Lufthansa comments, detail on Dirks)
BERLIN, Dec 7 (Reuters) - Lufthansa named ThorstenDirks, a telecoms exec used to cut-throat price competition, toits management board on Wednesday to lead the expansion ofbudget unit Eurowings, which is rapidly building its presence inEurope.
Eurowings is Lufthansa's answer to regain market share lostto rivals such as Ryanair and easyJet, whichhave shaken up the airlines industry with low fares, whilekeeping tight cost control thanks to harmonised fleets andflexible staff contracts.
Lufthansa wants Eurowings to become Europe's third largestpoint-to-point carrier and has planned deals to lease up to 40planes and their crew from ailing rival Air Berlin and take overBrussels Airlines.
Dirks, born in 1963, began his career with the German AirForce but has spent much of his career in the telecoms industry.
From 2007, he headed budget mobile carrier E-Plus, whichdisrupted established German rivals by luring customers withlow-cost pre-paid contracts.
He was instrumental in its acquisition by Telefonica SA in 2014 and was named by the Spanish group to lead itsGerman arm, Telefonica Deutschland, following the 8.6 billioneuro ($9.2 billion) takeover of E-Plus.
"Dirks has shown that he achieves economic success with firmcost control," Lufthansa CEO Carsten Spohr said in a statement,highlighting his ability to strike partner deals.
Dirks is also head of telecommunications and IT industryassociation Bitkom, and Lufthansa said it hoped to use Dirks'digital expertise to help drive passenger growth at Eurowings.
Airlines are increasingly turning to smart analysis ofcustomer data and spending habits to tailor tickets andencourage passengers to spend on repeat trips or ancillariessuch as food.
Dirks, whose contract with Lufthansa runs for three yearsfrom May 1, 2017, unexpectedly announced plans to leaveTelefonica Deutschland late last month.
He replaces long-time Lufthansa manager Karl Ulrich Garnadt,who is retiring because he is turning 60 in January.
($1 = 0.9324 euros) (Reporting by Victoria Bryan and Harro ten Wolde; Editing byMaria Sheahan)
easyJet (EZJ)