Air France-KLM Group plans to create a new long-haul airline to fend off Persian Gulf rivals and will scale back short-haul ambitions as new CEO Jean-Marc Janaillac pushes to revive a company beset by internal strife and waning market share. The group will establish a French arm parallel to Air France aimed at turning a profit in “ultra-competitive” long-haul markets, Janaillac said Thursday. The project, identified for now as Boost, “will not be low cost” and will draw pilots from Air France on a voluntary basis while flight attendants will be hired from outside the company. The unit will get 10 planes by 2020, with new routes comprising a third of its flights. The group’s European point-to-point flights will operate only under the Hop! and Transavia brands as of next year, with the Air France and KLM names reserved for network operations. Janaillac’s nine-point business strategy also includes increasing annual revenue about 10% to E28b by 2020 and reducing costs by more than 1.5%. It’s a response to new long-haul competition from low-cost European carriers such as Norwegian Air Shuttle ASA as well as growing Gulf airlines including Dubai-based Emirates. The CEO is seeking to balance operational changes with demands from labour unions that have led to profit-sapping strikes in recent years. “We shall be fighting back on every front,” Janaillac said. “The status quo is not an option.” The company didn’t specify how much it will invest to create or run the new carrier, whose name hasn’t been finalised but will include Air France in its branding. It will aim for reduced costs to be competitive with “aggressive” pricing from Gulf-based carriers, though fares shouldn’t be lower than the main carrier’s offerings, Janaillac said. “The goal is not to have cheaper fares,” Janaillac said. “The only goal is to stop us from losing money. If we reduce costs by 10% and the fares are 10% cheaper, that won’t solve our problem.”<br/>