Air France – KLM is going to set up a new airline to compete with Gulf state airlines as part of a nine-point plan to win back market share and turn loss-making routes into profit centres.

The new initiative, dubbed Boost, is the Air France – KLM ‘response to Gulf State airlines which are developing at low production costs in key markets,’ the airlines said in a statement.

Based at Charles de Gaulle airport, the new company will be ‘simple, modern and innovative’ and will not be positioned as low cost, the statement said. ‘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 planes will be staffed by Air France pilots on a voluntary basis and talks with the unions on staffing arrangements will begin soon.

The new strategy, named Trust Together, also aims to boost competitiveness, improve links between the various airport hubs and set up lobbying activities on competition issues.

Air France – KLM also said on Thursday it had booked net profit of €544m in the third quarter of the year, up from €481 in the same period last year. Revenue was almost €7bn, down €400m on a year ago.