Air France-KLM is to launch its own budget airline focused on the French market.

KLM’s price fighter subsidiary Transavia will have a 40% stake in the new enterprise. Transavia operates a combination of charter and regular services. The new airline will be based at Paris Orly and serve popular holiday destinations such as Morocco and Spain. Air France-KLM booked net profit of €618m in the first six months of this year, an increase of 50% compared to last year’s earnings excluding one-offs. Turnover was up 10% at €11.9bn.