Air France-KLM plans a new long-haul arm to counter increasing competition from Gulf carriers.

The new unit will run a fleet of ten long-haul aircraft by 2020, with almost a third of operations focused on new routes from Paris.

The new initiative, named Boost, will employ Air France pilots and cabin crew differently to the main airline but Air France-KLM denies it will be a low-cost offering.

“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,” the airline said.

“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 start-up is part of a wider ‘Trust Together’ initiative as Air France-KLM aims to regain its leadership position in key markets.

The group is targeting profitable growth for long-haul operations of between 2%-3% a year through to 2020.

Low-cost short-haul arm Travsavia will be expanded from Paris Orly and the regions with a focus on competing with TGV high speed rail services and budget airline rivals.

The overall project aims to deliver revenues of around €26 billion by 2020 with 100 million passengers carried on a fleet of 435 aircfraft.

Chairman and chief executive Jean-Marc Janaillac said: “With Trust Together, Air France-KLM regains the offensive with a project which is both ambitious and realistic.

“It will enable us to capture our share of air transport industry growth by improving the competitiveness of our businesses. With our nine strategic priorities, we shall be fighting back on every front.

“Our strength lies in the fact that we are challengers. The status quo is not an option. We must launch a new dynamic to return to a leadership position in our markets.”