AZ is losing EUR 0.5 million a day. Do you really think LH can either pay for these loses (from what other business units make) or make AZ a profitable business? I do not think so... Yes they were successful with SN, but I think it was because SN merged with low cost Virgin Express (even before LH stepped-in) and adopted VX business practices. I do not see it happening - AZ already merged with profitable Air One and is still losing money.
How about letting AZ just go bankrupt.