Air France-KLM is considering the establishment of a budget carrier to increase its competitiveness in the French market, according to company sources.

The budget wing of the carrier would be called “Air France Express” and would operate cheap flights within France, with the cities of Marseille, Nice and Toulouse as its bases.

It is understood that the budget company may be set up as early as next year.

Air France-KLM already operates a budget division, Transavia, but Air France Express would focus only on France.

RyanAir and Easyjet are the two major competitors for the potential new budget airline.