On 28 April 2008 Lufthansa announced plans to commence intra-European flights out of Milan Malpensa Airport using 6 Embraer 195 aircraft from its subsidiary Air Dolomiti. On 26 November 2008 the new brand Lufthansa Italia was formed instead of the originally planned Air Dolomiti operations. Operations started on 2 February 2009 using the larger Airbus A319 jetliner. The new subsidiary was established to allow Lufthansa to better tap into the lucrative North Italian market that was all but abandoned by Alitalia during a series of cutbacks. The airline's on board cuisine was aimed towards the Italian market, with Italian foods and drinks. For example, in business class, Italian espresso was served.
On 23 July 2011, Lufthansa reported in a press release that it would stop all Lufthansa Italia flights at the end of the IATA summer 2011 timetable (ending 29 October 2011). All the aircraft returned to Lufthansa. The last scheduled flight of Lufthansa Italia was LH3627 on 29 October 2011, which landed at 16:35, coming from Palermo to Milan-Malpensa, which was flown on the Airbus A319-100 with the registration D-AKNJ.
Five of the airline's aircraft came from Lufthansa subsidiary Germanwings, and the other five came from Lufthansa's base at Munich. All aircraft were given names of Italian cities, such as 'Bologna' and 'Varese', and were painted in a modified Lufthansa livery. The aircraft retained their German registrations. In 2010, the airline planned to replace one A319 with two Airbus A320, but this never occurred. Two of the five daily flights to London were operated by a BMI Airbus A321 in a 31/118 configuration.