SAS is applying for an Irish Air Operators Certificate in order to set up the lower cost arm that will operate under the existing brand name from an unnamed London airport.

The airline said aircraft based in London and Spain “will have the same customer offering and appearance as other airline operations at SAS and with corresponding requirements in terms of safety and standards”.

SAS is copying rival Norwegian in acquiring an Irish AOC - setting up a new company will allow SAS to operate with a lower cost base and to compete with its main rival Norwegian plus easyJet and Ryanair on key short-haul routes.

SAS said ‘a small number of departures’ would operate under the Irish AOC ‘as a complement to SAS’s existing production’. The airline sees expansion outside its own borders as vital as it has a relatively small home population and its key routes have been badly affected by low-cost competition.

Rickard Gustafson, SAS president and chief executive said: “In line with SAS’s strategy of focusing on those customers who travel frequently to, from and within Scandinavia, the majority of SAS’s airline operations will continue to be based in Scandinavia moving forward.

“The establishment of new bases means we can complement our Scandinavian production and, in time, build an even broader network with a superior schedule to the benefit of our customers.”