The new subsidiary, with its own livery but retaining BA’s distinctive Union Jack tailfin, will operate between Paris Orly and New York JFK airports.

It will start with one 82-seater Boeing 757 jet, offering three classes of seat but will have six aircraft by the end of 2009 as the New York service extends to other European cities such as Amsterdam, Frankfurt and Milan.

BA chief Willie Walsh wants to take advantage of the Open Skies agreement between the US and European Union, removing bans on airlines flying direct to the States from outside their own country.

Despite the threat from high fuel prices and the collapse of business airlines such as Silverjet, Walsh said: “We believe OpenSkies can compete effectively. It has a low cost base and support from BA in key areas.

“This differentiates it from some new airlines that have failed recently which were operating without the backing of an established carrier.”