Air France-KLM could set up a “low-cost” domestic carrier in a bid to win back market share in France from budget rivals, according to sources within the company.

The new carrier, dubbed “Air France Express”, could start service as early as next year from a series of bases across southern France, reports the news agency AFP. The main hurdle would be reaching an agreement with the unions.

The airline declined to comment but an unnamed source told AFP: “Studies are underway to find some way to fight off the ‘low-cost’ airlines. Among ideas being considered, is setting up a new entity within Air France-KLM,” one of the sources said, asking not to be named.

“The idea would be to base some pilots in Marseille, Nice and Toulouse and to do like easyJet – avoid having aircraft overnighting away from their operating base,” the source added.

This model could mirror the likes of easyJet and Ryanair that operate from many bases rather than just one or two, which allows them to setting up more efficient regional hubs and thereby keep down costs.

Air France-KLM could achieve greater flexibility by moving some services outside of its main hub at Roissy-Charles de Gaulle, Paris.

Pilots would work the same number of days but would be in the air for more of their working day, getting paid more but not quite as much more as would be saved in costs, the source added.

Air France-KLM already operates a low-cost carrier, Transavia, offering a number of pan-European services.