Air France-KLM has announced plans to create a new long-haul international airline to compete against growing competition from the Middle East and regain its market share in key routes.

"This new company will constitute the Group's response to the Gulf State airlines which are developing at low production costs on key markets where Air France-KLM is pursuing its growth ambition," Air France-KLM said in a statement.

This initiative to regain market share has been dubbed Boost.

It will be focused on ultra-competitive markets and will enable the Group to go on the offensive by opening new routes, re-opening routes closed due to their lack of profitability and maintaining routes under threat.

This new company will propose a simple, modern and innovative offer, whose positioning will not be low cost. It will offer its customers business and leisure destinations with standards comparable to those of Air France in terms of product quality and the professionalism of the crews.

The new company will also serve as a laboratory for the Group’s innovative ability in terms of products, digital and technology, catering, cabin design, services and the customer experience, as well as for working methods.

It will number 10 long-haul aircraft by 2020 with some 30 per cent of operations focused on newly-created routes. It will operate with Air France pilots on a volunteer basis at work conditions adapted to its competitive positioning. For cabin crews, an independent career path will be created to enable this new company to be operated at the level of market costs.

The ground operations, handled by Air France, will also be optimized by benefiting to the maximum from digitalization. The HR framework for this new company will be negotiated with the unions in the coming weeks. – TradeArabia News Service