Yes HLX is pulling out of LTN because it did not bring in the right mix of traffic. MAN will be their area of concentration from now on.
Germanwings is a very decent operation. It was created by Lufthansa to keep control of the ever expanding German low cost market, don’t forget LH operates 80% domestic so effectively if they created a proper operation they would win control of this market also. From the opinions I have heard of the airline, I think they run a very succesful operation and have prepared LH for the low cost era quite well.