British Airways has confirmed it will launch a short-haul subsidiary at Gatwick.

The airline will operate under the British Airways name but will exist as an “entirely separate entity”, the firm said.

It will start flying in March 2022.

Thirty-five short-haul destinations will be served, including Athens, Berlin, Faro, Ibiza, Madrid, Malaga, Marrakech, Milan Malpensa, Santorini and Tenerife.

British Airways said tickets are available from £39 each way (based on a return journey) and are “competitive with those of Gatwick no-frills carriers”.

This puts it in competition with easyJet, which is the dominant airline at Gatwick.

British Airways negotiated new agreements on pay and working conditions with pilots and cabin crew in relation to the new subsidiary.

The operation will be similar to that of BA CityFlyer, which is a British Airways subsidiary based at London City.

It will initially be run by British Airways, starting with three Airbus short-haul planes before ramping up to 18 aircraft by the end of May ahead of the crucial summer holiday period.

By autumn 2022 flights will be managed separately under the trading name BA Euroflyer, but the brand name will remain British Airways.

Passengers are being promised they will receive “the same high level of service they expect of British Airways”, including free water and snacks, a “generous” baggage allowance, free seat selection within 24 hours before departure and frequent flyer benefits.

The vast majority of British Airways’ short-haul flights from the West Sussex airport have been suspended since March 2020 due to the coronavirus pandemic.

The company previously said the flights were loss-making even before the virus crisis, and they would only restart if there was “a competitive and sustainable operating cost base”.

British Airways chief executive Sean Doyle said: “Today is a landmark moment for British Airways.

“The creation of a new British Airways short-haul organisation means Gatwick customers will benefit from access to a premium service from the UK’s flag carrier at competitive prices.

“We are looking forward to bringing a short-haul network back to Gatwick, with a fantastic flying team in place, to serve our customers from London’s second hub airport, which we feel sure will be a success.”

Gatwick is usually the UK’s second busiest airport, but has been hit hard by the pandemic.

Just 4.6 million passengers travelled through the airport in the 12 months to the end of October, compared with 46.6 million in 2019.

Gatwick chief executive Stewart Wingate said: “This significant news will be very welcome for many people connected to the airport.

“Despite the ongoing public health situation, today’s announcement is a positive signal that consumer confidence is returning as people start thinking about making travel plans for next summer.

“Given the difficult period we have all just been through, we expect BA’s new and extensive network of services from Gatwick to destinations across Europe to be in high demand and our staff, retailers, restaurants, cafes and bars are all looking forward to welcoming BA passengers back in larger numbers from April next year.”