British Airways (BA) has announced plans to establish a US-EU subsidiary airline called OpenSkies.
The new venture will offer daily flights from New York to Brussels or Paris and will operate from June 2008.
Initially the airline will utilise a single Boeing 757 aircraft, capable of carrying up to 82 passengers, with three onboard cabins: business, premium economy and economy.
BA plans to add a second aircraft to the business later in the year, with a total of six scheduled to being operating before the end of 2009.
All aircraft will be drawn from the current BA fleet.
"This is an exciting new venture for us and we're confident that it will be a great success as we build on the strength of British Airways' brand in the US and Europe," said British Airways' chief executive, Willie Walsh.
The new airline is partially a response to the liberalisation of the European aviation market.
"By naming the airline OpenSkies, we're celebrating the first major step in 60 years towards a liberalised US/EU aviation market which means we can fly between any US and EU destination," continued Mr Walsh.
"It also signals our determination to lobby for further liberalisation in this market when talks between the EU and US take place later this year."
Last year EU transport ministers gave initial clearance to plans to free up the transatlantic aviation market as part of the long-sought "open skies" accord.
The plans are expected to drive down ticket prices and lead to an increase in passenger numbers once they come into effect on March 30th.
OpenSkies' managing director will be Dale Moss, British Airways' former director of worldwide sales, and the airline is registered in the UK.