Air France-KLM to launch lower-cost airline

Air France-KLM is creating a more "competitive" long-haul airline to win back customers from Gulf carriers.

Air France's new boss, Jean-Marc Janaillac, unveiled the plan, saying the firm is "battling on all fronts".

The new brand does not have a name yet, but Air France plans for it to offer economy and business travel on new and reopened routes.

To compete with lower-cost rivals, its pilots and crew will be employed on different terms from the main company.

"The status quo is not an option. We must launch a new dynamic to return to a leadership position in our markets," Mr Janaillac said.

Jean-Marc Janaillac was appointed Air France chief executive in May

The plan is a sign that Air France's new boss is determined to win back market share after years of painful job losses and clashes with trade unions.

But the SNPNC cabin crew union expressed concern that the new airline's staff would not have the same work benefits and that it would end up being "low cost" for its workers.

Air France plans for the new airline to have 10 long haul planes by 2020.

It will "constitute the group's response to the Gulf State airlines which are developing at low production costs", the firm said.